The pace at which vehicles are switching from traditional internal combustion engines (ICE) to electric powertrains has a direct impact on the demand for platinum. Platinum is a key component in catalytic converters, devices that reduce harmful emissions from ICE vehicles. When vehicle electrification slows down, it means more ICE and hybrid cars remain on the road longer, keeping the need for platinum strong.
Recently, electric vehicle (EV) production growth has slowed significantly compared to previous years. In 2024, EV production increased by only about 9%, marking the weakest growth since EVs began gaining mainstream traction. This slower shift towards full electrification means that automakers continue producing many vehicles with internal combustion engines or hybrids that still require platinum-based catalysts to meet emission standards.
In places like the United States, this trend is especially noticeable as some car manufacturers have scaled back their electrification plans due to changing policies and reduced subsidies for EV buyers. These shifts encourage continued reliance on traditional engines or hybrids rather than pure electric models. As a result, industrial demand for platinum rises because these types of vehicles use more platinum in their emission control systems compared to fully electric cars.
Additionally, geopolitical factors such as tariffs and supply disruptions have contributed to market uncertainty but also kept interest in platinum high among investors and industries relying on it. For example, South African mines—the world’s largest source of platinum—have faced challenges like energy shortages and aging infrastructure limiting supply just as demand remains steady or grows slightly due to slower electrification.
Meanwhile, other sectors such as jewelry manufacturing in China are also increasing their use of platinum as they move away from gold amid high prices there. This adds another layer supporting overall demand beyond automotive uses.
In essence, while global trends push toward an electrified future with batteries requiring different critical materials like lithium and nickel, **the slower-than-expected transition keeps internal combustion engine technology relevant longer**, thereby sustaining strong demand for **platinum** well into the near term. This dynamic helps explain why prices recently surged to levels not seen in over a decade—reflecting both supply constraints and ongoing industrial needs tied closely to how quickly—or slowly—the world moves away from fossil-fueled transportation options.