Silver demand in auto sector to grow 3.4% annually, EVs to overtake ICE as biggest consumer by 2027: Report

New Delhi [India], December 10 (ANI): Global silver demand from the automotive industry is projected to grow steadily at a CAGR of 3.4 per cent between 2025 and 2031, as the metal continues to play a pivotal role across emerging technologies and green transition industries, according to a research report released by Oxford Economics, a global advisory firm.
The report highlighted that silver is increasingly being referred to as a "next-generation metal" due to its growing applications in electric mobility, renewable energy, and digital systems.
Oxford Economics stated, "We forecast global silver demand by the automotive industry will increase at a CAGR of 3.4 per cent between 2025-2031 and reach approximately 94 million ounces 2031."
In 2024, internal combustion engine (ICE) vehicles accounted for 55 per cent of the automotive sector's silver demand, while electric vehicles (EVs) contributed 30 per cent. However, the rapid pace of EV adoption and manufacturing is set to reshape the consumption pattern.
The report noted that EV production is expected to overtake ICEs as the primary source of silver demand by 2027 and will account for 59 per cent of the share by 2031.
While the electrification of the automotive industry remains a strong factor supporting future silver demand, the report pointed out certain caveats. It said the upper and lower consumption bands across vehicle powertrain types are broad, which could skew forecast estimates either way.
The report also assumes average usage remains unchanged over time, but this may vary as vehicles integrate more electronic features. Additionally, the move toward autonomous driving could increase the need for sensors and ECUs, further pushing silver demand.
However, efforts to consolidate multiple ECUs into a single domain control unit could limit consumption growth over the forecast period. But overall, the transition to EVs remains the driving force pushing silver demand upward, primarily due to the increasing use of electrical and electronic components in vehicles.
Beyond the auto sector, silver is emerging as a critical material supporting the green energy transition and digital transformation. With the highest electrical conductivity among all metals, silver enhances energy conversion in solar panels, accelerates data processing in data centres, and enables rapid charging and efficient power transmission in electric vehicles.
Meanwhile, silver prices touched an all-time high on Tuesday, reaching Rs 199,000 in the bullion market. (ANI)