Global Platinum Industry Could Be Hit Hard By EV Revolution

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The rise of the electric vehicle market over the next decade or two will impact the platinum market significantly, according to a new report from Bloomberg.

As the auto industry is the largest user of platinum worldwide — owing to its inclusion in vehicle exhaust systems (used to strip emissions of certain compounds) — the move towards electric vehicles (EVs), and away from vehicles that feature exhaust systems at all, will presumably put a big dent in demand. As it stands, roughly half of the platinum sold annually around the world is sold to the auto industry.

Tesla Model 3 x 2

“It’s a long term risk to platinum, electric battery vehicles don’t need any platinum at all,” stated Marc Elliott, an analyst at Investec Plc, in an interview with Bloomberg.

Bloomberg provides more:

While he sees a decade-long transition through hybrid vehicles, which may use platinum, he says battery-electric cars are most likely to take over. Last year, almost one of every two ounces of platinum used worldwide was sold to the auto industry, from mines primarily in South Africa and Russia.

EV adoption is set to grow rapidly over the next few years — partly as a result of improving battery tech and increasingly attractive consumer offerings (Tesla Model 3, Chevy Bolt, etc), but also partly as a result of increasing government support in some regions (EV bus systems, etc).

“It’s not all about Tesla anymore,” stated Andrew Miller, an analyst at Benchmark Mineral Intelligence Ltd in London. “There’s a whole load of battery-manufacturing expansion happening in China, Korea and Japan.”

Miller predicts that hybrids and EVs will make up 5% of the overall auto market by 2020. While that figure wouldn’t result in huge losses for the platinum industry, it could serve as a forerunner of a harsher market future for platinum miners.

Image by Tesla Motors

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James Ayre

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.

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39 thoughts on “Global Platinum Industry Could Be Hit Hard By EV Revolution

  • The ICE supports so many different industries around the world, is it any wonder there is such a fight to keep it going?

    • Yeah.. just check out one of those videos of German Aluminium/Magnesium/Iron furnace/casting industry videos on youtube.
      I’m sure they can adapt though and make e-motor caps now and IGBT housings and some parts for wind turbines need that technology too.

      • With things undergoing revolutionary change there is bound to be a lot of conversion going on. Auto gearboxes to wind turbine gears and pumps for flow storage or hydro. Many examples.

        • we are still a long way from revolutionary change in the auto industry. Us here and Tesla fans are convinced sure but I wouldn’t call EV’s at less than 1% of the market revolutionary…. yet.

          • True. But after you wait decades for it, and 400,000 are ordered in less than a month, I get the whiff in the air…. of change.

          • Very fair point, its just such a faint whiff I’m not 100% sure I smell it just yet =)

          • I get your drift. You want full response. Me, too. 🙂

          • It depends on the if it goes in a straight line, shallow curve, or an S curve. At straight line or a shallow curve would mean it will be a slow climb over several years before even a majority of new vehicles are EV but an S curve would mean there would be a point were the market changes and sales will sky rockets. We might be there. To be honest I am watching the next gen EV closely. Higher then expected sales of the Bolt and other 200 mile EV could be a sign the market is ready. At that point most car dealers will be pushing to get their next gen models out and the percentage will start to climb fast.

    • It can be kept going by biofuels… problem is, biofuels can’t compete with oil right now.

      • Range extenders and biofuel would make a great combination.

      • Platinium still have a bright future with fuell cell vehicules of hydrogen

        • Yep. Might sell three or four hundred a year. In a good year.

  • sell it to the gold bugs. a couple barren of platinum fits their idea of wealth storage.
    Or even better, make in gold pressed platinum bars, something the Ferengi surely approve of 😉

  • If 500K / 90M = 0.5% overall market = 1 battery Gigafactory = world output of Li-ion batteries in 2013

    5% overall market = 10 Gigafactories = order of magnitude more Li-ion batteries in only 4 years

    Unless these numbers are way off, someone had better start building Gigafactories. Otherwise, we would seem to be heading for a massive bottleneck on the Li-ion side. I don’t see any analysts talking about this.

    • Battery suppliers are waiting on auto manufacturers. Auto manufacturers are mostly still dragging their feet.

      On the upside, this will free up lots of platinum for fuel cells. Although I don’t really expect too many to actually get built…

      BTW, platinum mining and refining is a horribly dirty, polluting, energy-intensive business. Needing less of it is a good thing.

      • Then again, so is nickel-cobalt mining on the scale needed for all of these batteries. The ore grade is about 1%, so mines leave behind 100 times as much in tailings as gets produced.

        ICE vehicles use about 1 g platinum group metals per vehicle. NiCoMnOx is 20-30% of battery weight, so 100-150 kg/vehicle for Model S. Five orders of magnitude more material per vehicle. Ni/Co raw material mining and processing is the highest-impact component of battery production.

        • While Nickel is major constituent today, future chemistries are likely to feature sulfur, carbon nanotubes, graphene, etc. Production of these are likely to be far more benign. (Disposal of CNTs and graphene may be problematic though, you don’t want to be breathing them…)

          • Maybe in ten or twenty years, when production of CNTs and graphene costs less than $hundreds/gram. Even so, are you really going to get 3 V from a carbon or sulfur cathode? Next best cathodes are LiFePO₄ and LiMn₂O₄, but they have much lower energy density than NMC.

            For the foreseeable future, nickel is king, and it’s pretty dirty in the quantities needed.

          • Unlike asbestos, you can burn them.

        • Any idea how much neodymium and copper EVs are likely to use? ( i read that Tesla uses induction motors, not permanent magnets, but don’t know about the other contenders.)

          • *All* of the other contenders use rare earth permanent magnet motors, on the order of 1 kg of NdPr per vehicle, typically 75-25 Nd-Pr. I don’t know the motor tech that well, but hear that induction motors have lower power/weight and lower efficiency at low speeds. But there have to be advantages other than no rare earth use, or Tesla wouldn’t use them, right?

            A lot of the copper use is in the battery pack, and I hear the Tesla 85 kW pack has less copper than the Ford Energis with just 7.6 kWh!

            Anyone else know more?

          • A friend of mine here converted a Toyota RAV4 to electric with a Chinese permanent magnet motor, and subsequently two Honda Insights ( ? ) using US made squirrel cage motors. They’re all going OK but he prefers the American ones, for reasons I don’t know enough to comment on. Likes his Chinese batteries though!

    • This is one of the most ignored problems facing the EV revolution. Governments and supporters making claims to mandate or require or project huge EV sales are blatantly ignoring that it is physically impossible to build EVs on mass today. Even when the industry is finally convinced (2018-2020 optimistically) it will take at least a couple more years to build a few factories and even then we are talking single digit market penetration… It is going to be a slow road.

      • Tesla & Panasonic started on the Gigafactory a couple years ago. Before there was demonstrated demand. Tesla just said it will be able to provide the batteries for 500,000 EVs in 2018, and the company can get to ~1 million by 2020.

        We still have a long way to go, but if OEMs + LG/Samsung/Panasonic provide attractive offerings (+ SUPERCHARGING!) it could happen a lot faster. But OEMs are holding back with attractive offers, aren’t really touching Supercharging (from what we’ve seen publicly), and it seems haven’t given battery companies enough encouragement to start building more gigafactories. I think they still need a push, but they may be getting it more from Tesla now than governments will ever provide it.

        • Precisely my point, it has taken years and still a couple more years for Tesla/Panasonic to build a plant capable of producing 500,000-1mil batteries for Ev’s. The Major Manufacturer’s are still showing an amazing ability to resist the transition to EV’s and I fear they will continue this resistance. I think once Tesla has the Model 3 out in significant numbers consumer awareness will increase signifcantly and demand will hopefully increase. However, that is sadly still a few years away and then a few years more to build the necessary factories. We quickly get to the 2025 type timeframe before anything “significant” starts to happen… Some of us here likely define “signifcant” differently but for me it is somewhere around at least 10% of the market and even then 1/10 vehicles being an EV isn’t “really significant”…. Slow… At least I will have MY Tesla EV sometime around 2018 2019 and I know I will do my part to spread the word until then and definitely once I have my Tesla to show people.

          • OK, yeah, I agree without further big news regarding battery plants. But I think that could come within the next couple of years. 500,000 cars may not be a lot in the grand scheme of sales, but it is enough to put BMW, Audi, and others on the brink of failure in the US. They need a response.

          • Particularly when you consider the impact of an equal number of Model Y CUVs… Who is going to buy an X3 once the Y is available?

          • I agree they need a response but putting 2+ major manufacturer’s on the “brink of failure” is extreme to say the least. Don’t forget Tesla preorders are not guaranteed sales and are global not just US based…

          • We’ve got an article coming on this topic in a lot more detail… but it is taking a long time.

  • A small range extender PEM fuel cell uses about as much platinum as a car catalytic converter. Reform liquid hydrocarbon fuels on board, you have range with quick fill up.

  • The amount of platinum in a catalytic converter varies with the power of the engine (link), from 2 to 30 grammes. So a shift to hybrids will by itself lower platinum use considerably if the ICEs are low-power range extenders not connected to the wheels. It seems likely that indirect-drive hybrids like the Bolt Volt will grow faster than the very complex dual-drive types designed for Mr. Toad.

    Catalytic converters also use rhodium, another rare and expensive metal. The rhodium speculators among our readership should watch out.

    • You mean the Volt?

      • Yes. Thanks, fixed.

  • The recording industry may have to change its platinum sales certification to lithium.

    • yes. and hydrogen is losing to EVs. it may make a comeback for space heating converted to methane from renewable resources when renewables reach high integration levels, tho.

  • There was a reason internal combustion engines replaced steam engines. Steam was 7% efficient while ICEs were about 15%-20% efficient…the same path is clear for EVs which are 90%-95% efficient. In the process, a whole lot less maintenance, materials and parts are needed. Best of all a lot less polluting fossil fuel is used.

  • Platinum is an incredibly useful metal, and a limited resource. So a drop in the price and demand for it should allow for more widespread and efficient use. Another hidden benefit of EVs I think.

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