Silver Use in Vehicles Set to Surge

The Silver Institute recently released a report on the burgeoning use of silver in vehicles and particularly electric vehicles (EV’s).  From the report:

“While highly variable across different vehicle types and markets, our research suggests a range of 0.5 to 0.9 ounces (15-28 grams) is consumed in one internal combustion engine (ICE) vehicle, with higher loadings estimated for hybrid and then electric cars. Even so this may sound extremely modest, but it is worth noting that in 2021 global light vehicle (LV) production is expected to be around 85m units (source: LMC Automotive). (While this report focuses on LVs, it is important to acknowledge the use of silver components in both motorcycles and heavy duty vehicles, although in each segment silver loadings will be far lower than in LVs.) This in turn suggests that silver auto demand this year will be in the region of 61Moz (1,900t). To offer some perspective, this compares with the forecast 98Moz (3,000t) of silver that Metals Focus expects to be consumed in the photovoltaic industry in 2021”

The report goes on to project strong growth in the sector as well:

“As such, the above forecast total of 61Moz (1,900t) for 2021 may be a conservative total. Looking further ahead, this total could approach 88Moz (2,700t) by 2025”

This sector is just part of the growing industrial demand for silver due to its unique properties.  As with most other uses, the likelihood of any material recovery of all this silver at the completion of the life of the vehicle is low.  That means this is likely lost to landfill and hence ever reducing stocks without new mine supply.

The growing green agenda and its financing from more and more fiscal spending is great news for silver as well as platinum as we’ve reported previously.