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I've seen various projects using copper lugs and compressing them with bench vices but what is the actually use? Can't you just use wires without the lugs?

Example of Lugs/Ferrules Image Source

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1) It's not easy to make a safe and reliable connection under a screw head to stranded wire, especially wire with hundreds of strands (like very flexible very large gauge wire). The barrel of a lug is designed to keep all the wire strands safely contained and under control. This is especially true where solder is an unreliable mechanical bond for the wire to the equipment (e.g. in power distribution systems)

2) If the wire needs to be removed, replaced, moved, or added to the device, then a lug and lug socket (or screw/bolt) is a more field-configurable type of connection, and can be mated/unmated many more times than bare (especially stranded) copper wire.

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When's the last time you've had to make wiring repairs out in the field? Or heck, even re-doing the battery connection on your car. It's much easier to take a set of crimpers and lugs with you than having a propane solder torch (not to mention you don't have the chance to set adjacent things on fire). Add to that when you've got massive wires, soldering is error-prone (strand oxidation if your timing/temp is off w/) and ugly.

Lugs are stupidly simple. And that's a good thing.

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The problem with using the bare wire is that copper is very ductile. Given enough time it may work itself loose from even very tight compression.

Steel is far less ductile so using a lug that holds not only onto the copper wire but also onto any sheathing as well will result in a much more robust connection.

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