The auto industry plays a crucial role in the rising demand and price of platinum, mainly because platinum is a key component in catalytic converters used to reduce harmful emissions from vehicles. For many years, the rise of electric vehicles (EVs) was expected to diminish platinum’s importance since EVs don’t need catalytic converters. However, this expectation is shifting.
Firstly, hybrid vehicles are becoming more popular as automakers scale back overly ambitious EV targets. Hybrids still rely on internal combustion engines and thus require catalytic converters. Interestingly, hybrids often need even more platinum than traditional gasoline cars because their engines run cooler due to start-stop technology and battery operation modes. This cooler running means higher concentrations of platinum are necessary for the catalytic converters to work efficiently.
Secondly, there has been a notable substitution trend where manufacturers are replacing palladium with platinum in autocatalysts. This switch has grown significantly over recent years as palladium prices surged far above those of platinum. By using more platinum instead of palladium, car makers balance costs while maintaining emission standards compliance.
Despite concerns about EV adoption reducing demand for precious metals like platinum, internal combustion engine vehicles—including hybrids—are expected to remain relevant well into the 2030s or beyond. This continued presence supports steady or even growing demand for automotive-grade platinum.
Beyond just quantity demands, this shift also affects market dynamics by creating more balanced metal usage between palladium and platinum rather than heavy dependence on one metal alone.
In addition to automotive uses driving much of its consumption (about two-thirds), other sectors such as jewelry also contribute positively to overall demand and price strength for platinum today.
So essentially, the auto industry’s evolving approach—favoring hybrids with higher PGM content and substituting cheaper metals when possible—is a major factor behind why we’re seeing a resurgence in both interest and value for platinum right now.