The situation in the silver market is tense due to the massively increased demand from the solar industry. But it’s getting even worse, as the next revolution is already on the horizon in the automotive sector with the solid-state battery using silver developed by Samsung. It is characterized by fast charging times and high energy density, thus able to overcome the weaknesses of current lithium-ion batteries. Another advantage of this battery is its lower weight compared to the lithium-ion battery.
Technically and economically, this new technology has the potential to fundamentally revolutionize the car battery market. The bottleneck here, however, is again silver, as each vehicle equipped with this advanced battery is expected to require 35.3 ounces, or more than a kilogram of silver.
The rest is a matter of mathematics. A global production of 58 million electric vehicles is also expected by 2030. If we now assume that the superior silver solid-state batteries will displace lithium-ion batteries quite quickly and will be installed in 80% of vehicles, a gigantic demand for silver emerges in addition to that of the solar industry, which could take seven years of world production off the market by 2030.
How Realistic are these Assumptions?
It is indeed an unusual assumption that a new technology displaces an existing one and achieves a market share of 80% within just five years. It is only justified if the new technology is not just slightly better than the existing one, but offers so many and especially such great advantages that no consumer will be willing to buy a product that does not contain this new technology.
Assuming that Samsung’s claims about the new silver solid-state battery are correct, this is exactly the situation we’re facing. Even today, the battery in an electric vehicle is not only the most expensive component, but also the aspect that causes the value of the vehicle to decrease the fastest over time.
Samsung promises performance characteristics that are not only breathtaking, but so outstanding that they can completely displace lithium-ion batteries from vehicle construction: The silver solid-state battery charges much faster, has double the range, lower weight, and a longer lifespan. Since these are not just small but very significant advantages for the car buyer, it’s hardly to be expected that many consumers will choose an electric car with lithium-ion drive out of pure nostalgia.
A Battle for Available Silver Will Ignite
A market share of 80% or more for the new battery is thus anything but unrealistic, and the automotive industry should be aware that vehicles with classic lithium-ion batteries will immediately mutate into shelf warmers as soon as customers en masse know the advantages of the new silver solid-state battery and choose it when buying.
For the silver market, it’s no longer the technology, but only the timing of when Samsung decides to launch it that is decisive. After that, everything should happen very quickly. For 2027, sales of 32.2 million electric vehicles are already predicted. If 80% of them were equipped with the silver solid-state battery, this would result in an additional silver demand of 908.66 million ounces of silver.
Or to put it another way: Current annual mine production would not be sufficient to meet this demand. Together with recycled silver, it might be enough. But then the solar industry and all other industries that depend on silver would be completely left out in the cold. The world must therefore decide whether to put the little silver it has left on its roofs, use it for medical applications, install it in car batteries, mobile phones and laptops, or wear it as silver jewelry.
No matter how this decision turns out in the end. On the way there, there will be a hard fight for the little silver still available, and this will be fought out primarily through price.
