The surprising 'driver' of future silver demand
(Kitco News) - While silver is favored due to more photovoltaics and an uptrend in precious metals in light of currency worries, the Silver Institute said the electric vehicle sector is also going to need more Ag.
In a study published Tuesday, the institute said that increasing vehicle complexity will drive silver demand higher.
"Automakers today are increasingly relying on silver to enable the vast technological advances incorporated into modern vehicles. This has resulted in another powerful demand center for silver, with projections of nearly 90 million ounces (Moz) of silver absorbed annually in the automotive industry by 2025. Notably, by that time, this will rival silver consumption in the photovoltaic industry, forecasted to be 98 Moz this year, and currently the largest application of global industrial silver demand," writes the institute's authors.
Silver is already needed for internal combustion engines.
The institute said that the average vehicle silver loadings are currently estimated at 15-28 grams for internal combustion engines in a light vehicle. Hybrids need about 18-34g per light vehicle, while battery electric vehicles are believed to consume in the range of 25-50g of silver per vehicle.
And electric engines won't be the sole driver of the need for more silver.
"The move to autonomous driving should lead to a dramatic escalation of vehicle complexity, requiring even more silver consumption," writes the institute, noting that silver can already be found in a variety of electronic systems such as infotainment systems, navigation systems, electric power steering, and vital safety features, such as airbag deployment systems, automatic braking, security and driver alertness systems.
The network of charging stations needed for EVs will also need silver.