In today’s Finshots, we dive into how a cutting-edge EV battery could ramp up demand for silver, and what that might mean for its future.

But here’s a quick sidenote before we begin. We’re on the lookout for enthusiastic Insurance Advisors to join our team at Ditto Insurance! No finance or insurance background? No worries. We’ll train you from the ground up. Click here to apply.

With that out of the way, let’s get on to today’s story.

The Story

The race to dominate the electric vehicle (EV) market has been nothing short of thrilling. Just a few years ago, charging an EV meant twiddling your thumbs at a station for what felt like forever. But today, you can top up your battery in about 30 minutes and hit the road again.

But what if that time could be slashed to just 9 minutes?

Well, we didn’t pull that number out of a magic hat. It’s what Samsung’s latest battery promises. And that might seem like a big win for anyone tired of range anxiety and long charging times.

But here’s the twist. One of the key ingredients in this tech drop is silver! Yup, the same shiny metal we’ve all seen in jewellery. And investors holding silver are already buzzing with excitement.

That made us wonder ― Will this EV battery adoption send silver prices soaring?

Let’s take it from the top.

You see, silver isn’t just shiny and valuable like gold, it’s a true tech superstar. Not only does it boast the best electrical and thermal conductivity of any metal, but it’s also incredibly durable. This makes it perfect for everything from your phone and laptop to medical devices and solar panels. It’s a real multitasking marvel!

And now, silver is about to shine in the world of 9-minute battery tech! These new “solid-state” batteries ditch the liquid or gel electrolytes found in today’s lithium-ion batteries for a solid material. This makes them safer, more efficient and packs more energy.

Here’s the logic behind it. Inside a battery the anode acts as an energy reservoir. During charging, it stores energy, which then powers your car when you’re on the move. In traditional batteries, a gel helps transfer this energy. However, solid-state batteries use a solid material instead of the usual gel, making them both safer and more efficient.

And Samsung has taken things up a notch by adding a silver-carbon (Ag-C) composite to the anode. That’s because it’s a great conductor of electricity and super stable. Besides, having silver in the mix means that the battery is not only more efficient but also more durable. This clever combo is what powers the 9-minute charge and a 20-year lifespan, marking a major leap from today’s batteries!

But here’s where things get interesting. If suddenly, everyone needed a lot more silver — like, say, for millions of new EV batteries. The demand for silver could shoot up and prices might rise, right?

Now, Samsung hasn’t spilled the beans on the exact amount of silver in their solid-state EV batteries just yet. But we could dive into some numbers that analysts have crunched to get a sense of what’s coming.

Look, there are 80 million electric cars produced each year. And if just 20% of those cars start using the new solid-state batteries, that’s around 16 million cars.

Estimates suggest these batteries could require as much as 5 grams of silver per cell in Samsung’s solid-state batteries. And a typical EV battery pack that has around 200 cells for a 100 kWh capacity will require about 1 kg of silver per vehicle.

If you do the math (16 million cars x 1 kg of silver per car), that comes to 16 million kg or 16,000 metric tonnes of silver just for these cars.

To put that in perspective, the entire world currently produces about 25,000 metric tonnes of silver a year. So, these new batteries could end up using around 60% of all the silver that’s mined annually.

That’s massive! Silver’s already in high demand for solar panels, electronics and jewellery. And with limited mining supply, we’re not exactly swimming in extra silver. So when analysts say that these batteries will change the game for silver, they really mean it.

But hold on. These numbers are just estimates. So things might not turn out exactly as predicted. But hey, even if just 10% of EVs used these new batteries instead of 20%, it could still mean around 8,000 metric tonnes of silver or a third of the world’s annual production, which is still a big deal.

So, where does all of this leave us, you ask?

Well, we’ve seen silver’s starring role in big stories before. Remember the early 2000s when solar panels started taking off? Silver was a key player in solar photovoltaic (PV) panels, helping convert sunlight into electricity. As demand for solar energy grew, silver usage soared, pushing prices from around $5 an ounce (1 ounce = about 28 grams) in 2001 to nearly $50 by 2011. That’s a massive leap!

But here’s the thing. Despite today’s strong demand for silver in solar panels, prices are hovering around $28 per ounce — just $10 higher than a decade ago. So, why didn’t prices skyrocket?

Actually, they did. When silver started being used in solar panels, prices surged. Research shows that silver prices climbed alongside the demand for solar panels, especially after the 2008 global recession. And in 2011, when oil prices spiked, the shift to renewable energy pushed silver prices even higher.

But as the solar industry evolved, it got smarter about using silver more efficiently and even began exploring alternatives. This cooled the rally and prices eventually levelled out.

Also, you have to understand that silver prices are driven by a whole mix of factors like monetary policies, inflation, industrial demand, mining costs and more. Take the silver boom of 2010, for instance. Industrial demand skyrocketed, and silver prices shot up from $20 to $50 per ounce in less than a year. Clearly, the supply-demand relationship isn’t always as simple as it seems.

Fast forward to today, and analysts warn that the solar industry could put a serious strain on global silver supplies. In fact, the solar PV sector could deplete over 85% of the world’s silver reserves by 2050. Even India, the largest consumer of silver, is making record purchases for solar panels, keeping prices near their highest level in over a decade.

So yeah, it’s crucial to watch how silver reacts when demand surges, along with everything else influencing the market.

That said, solid-state EV battery tech could be a real game-changer in the long run and might even spark a new wave of demand and send silver prices soaring.

But here’s what all this tells us. Silver has a knack for making big moves when it’s part of a hot story. And with primary silver mines only producing less than a third of the metal (the rest comes from mining lead, zinc, copper and gold), and no major new mines on the horizon, the excitement is real.

This could undoubtedly be the next chapter in silver’s journey. But let’s not forget that Samsung plans to mass-produce these batteries by 2027. By then, we’ll have to see if the demand for solid-state batteries truly takes off. Also, there’s always a chance that newer, better technologies could pop up and reduce the demand for silver.

So, if you’ve got your money invested in silver, it’s worth keeping an eye on these exciting developments.

The only thing we don’t have answers to is, how long will it take for solid-state battery tech to really catch on? Could it be 10 years? 20 years? And more importantly, will silver still be a star player by then, or will something new steal the spotlight?

Only time will tell and we’ll just have to wait and see. Until then…

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