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Car Parts Will Push Silver Consumption to 90M Ounces By 2025

Silver Consumption
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EDITOR NOTE: The global automobile industry is evolving at a rapid pace as competition in the electric vehicle (EV) space heats up. But to boost competitiveness in this new EV era, carmakers not only have to innovate in design, but they also have to accumulate the necessary material components to make their designs viable for mass production. And silver is a key component in the production of electric vehicles. According to the article below, the automotive sector will need 90 million ounces by 2025 to produce vehicles, increasing silver consumption dramatically. The current shortage in silver and the low rate of production will make the silver market a tight arena for manufacturers. Add to this the monetary demand for silver as inflation heats up both the US and global economy, and scarcity will be a major factor driving up silver prices to record-shattering levels. This is what precious metals investors have been waiting for. While silver prices have pulled back, now is the time to accumulate non-CUSIP physical silver well before industrial and monetary demand makes the white metal much less affordable. 

Silver is used in the vast majority of automobile devices like the ones shown here.

With modern cars using more silver than ever in their advanced technology components, the worldwide automotive sector could need nearly 90 million ounces (Moz) annually of the metal by 2025, according to a recently-published report by the Silver Institute.

In four years, silver consumption in the automotive sector should rival that of the photovoltaic industry, forecast to reach 98 Moz in 2025, and currently the largest application of global industrial silver demand, according to the report Silver’s Growing Role in the Automotive Industry, produced on behalf of the Silver Institute by Metals Focus, an independent precious metals consultancy.

The report, part of the Silver Institute’s series of Market Trend Reports, examines trends in automotive production, including the growth and evolution of hybrid and battery electric vehicles. It also addresses transportation policies that favor vehicle electrification in some of the world’s most important vehicle markets. Highlights of the report include:

  • Silver’s widespread use in automobiles reflects its superior electrical properties, as well as its excellent oxide resistance and durability under harsh operating environments;
  • Silver is used extensively in vehicle electrical control units that manage a wide range of functions in the engine and main cabin. These functions include infotainment systems, navigation systems, electric power steering, and safety features, such as airbag deployment systems, automatic braking, security and driver alertness systems;
  • Average vehicle silver usage, which is currently estimated at 15-28 grams (g) per internal combustion engine (ICE) light vehicle, has been rising over the past few decades. In hybrid vehicles, silver use is higher at around 18-34g per light vehicle, while battery electric vehicles (BEVs) consume about 25-50g of silver per vehicle.
  • The move to autonomous driving should lead to an escalation of vehicle complexity, requiring even more silver consumption. Silver automotive demand this year is projected to be 61 million ounces.
  • Ancillary services that require silver are also increasing, including charging stations and charging points for electric vehicles; and
  • The acceptance of BEVs is gaining momentum as an increasing number of countries adopt policies that support the BEV industry. To download a copy of the report, please click here.

Originally posted on Silver Institute

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All articles are provided as a third party analysis and do not necessarily reflect the explicit views of GSI Exchange and should not be construed as financial advice.

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