Automotive sector to drive major silver demand

13th January 2021 By: Donna Slater - Creamer Media Staff Writer and Photographer

Automotive sector to drive major silver demand

Silver lobby nonprofit organisation the Silver Institute reports that a growing reliance on silver for technological advances by automotive manufacturers is resulting in “powerful demand” for the precious metal.

The organisation projects that the nearly 90-million ounces a year of silver will be absorbed in the automotive industry by 2025.

In addition, the Silver Institute points out that by that time, this demand will rival silver consumption in the photovoltaic industry, forecasted to be 98-million ounces this year – currently the largest application of global industrial silver demand.

In this vein and to provide a better understanding of silver’s important function in the automotive sector, the Silver Institute on January 12 released the ‘Silver’s Growing Role in the Automotive Industry’ report. The report is produced on its behalf by independent precious metals consultancy Metals Focus.

The report examines trends in automotive production, including the evolution of hybrid and battery electric vehicles. It also addresses transportation policies that favour vehicle electrification in some of the world’s most important vehicle markets. The report provides an analysis of silver automotive demand in a range of vehicles and the growing importance to silver demand of ancillary automotive services.

The report highlights that silver automotive demand this year is projected to be 61-million ounces, and that silver’s widespread use in automobiles reflects its superior electrical properties, as well as its good oxide resistance and durability under harsh operating environments.

It also illustrates that 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, among others, infotainment systems; navigation systems; electric power steering; and vital safety features, such as airbag deployment systems, automatic braking, security and driver alertness systems.

According to the report, average vehicle silver loadings – which are currently estimated to be between 15 g and 28 g for every light vehicle that uses an internal combustion engine (ICE) – have risen over the past few decades. However, in hybrid vehicles, silver use is higher at about 18 g to 34 g per light vehicle, while battery electric vehicles (BEVs) are believed to consume in the range of 25 g to 50 g of silver per vehicle.

Further, the report suggests that a move to autonomous driving should lead to a dramatic escalation of vehicle complexity, thereby requiring even more silver consumption.

The reports reveals that ancillary services that require silver are also increasing, including charging stations and charging points for electric vehicles, and that the acceptance of BEVs is gaining momentum, as an increasing number of countries adopt policies that support the BEV industry.

The report states that each stage of the transition, from ICE, to hybrid vehicles, to BEVs and eventually to autonomous driving, will be a net positive for silver demand.