In the early 20th century, a revolution in personal transportation was about to change the world.
The year was 1908, and Henry Ford had just unveiled his Model T, a car that would put America on wheels and spark an industrial transformation unlike any seen before. The heart of this revolution was the Model T's engine - a simple yet robust 4-cylinder marvel that produced 20 horsepower.
This powerplant, designed for reliability and ease of manufacture, would soon find its way into applications far beyond the automobile.
As Model Ts began rolling off assembly lines by the thousands, enterprising individuals across the country saw potential in Ford's creation.
Farmers, always eager for ways to increase productivity, were among the first to recognize the engine's versatility.
They began removing engines from old Model Ts and repurposing them to power everything from water pumps to grain mills.
The adaptability of the Model T engine sparked a wave of innovation. Soon, it was powering boats, generators, and even early aircraft. In rural areas, where electricity was still a luxury, the Model T engine became a lifeline, providing power for essential tasks and bringing modern conveniences to remote communities.
This technological transfer wasn't limited to small-scale applications. As the reliability and efficiency of the Model T engine became apparent, larger industries took notice. Mining companies began using modified versions to power equipment deep underground.
Construction firms found ways to incorporate the engine into various pieces of machinery, revolutionizing building techniques.
The Model T engine's influence extended beyond American shores. In Europe, where the scars of World War I were still fresh, the engine found new life in reconstruction efforts. Its simplicity made it ideal for powering portable sawmills and other equipment needed to rebuild war-torn cities
The silver market appears poised for a significant supply crunch that has not yet been fully reflected in its price. This impending shortage, driven by the rapid growth of electric vehicles (EVs) and renewable energy technologies, could lead to a dramatic price increase in the coming years.
The EV revolution and Silver demand
Electric vehicles are at the forefront of the growing demand for silver. Regardless of the vehicle type, any mode of transportation utilizing an electric engine contributes to this surge in silver consumption. The electric engine (silver battery) alone is projected to require 25,000 metric tons of silver annually for EV production.
This number is based on the adoption of Silver solid-state battery (if it’s good enough for EVs it’s good enough for almost any engine in any car, truck, bus, barge, or plane)
To put this in perspective:
- 25,000 metric tons is equivalent to approximately 803,750,000 troy ounces of silver.
- This is one year of mining effort
- How do you think the solar, aerospace, military, AI, robotics, and jewelry manufacturers are going to respond to being shoved out of line?
- This demand spans across various vehicle types, including cars, trucks, vans, buses, motorcycles, ships, barges, ferries, yachts, and even airplanes.
Silver's superiority in EV technology
Silver's unique properties make it the preferred material for many EV components, particularly in battery technology. Its excellent conductivity, corrosion resistance, and thermal management capabilities make it indispensable in the production of high-performance EV batteries.
Market size comparison: Silver vs. Nickel
To understand the potential impact on silver prices, it's instructive to compare it with the nickel market:
- The nickel market, with an annual production of 2.7 million tons, is expected to see price increases over the next five years due to EV demand.
- Projecting forward, The silver market, at approximately 25,000 metric tons per year for silver batteries, is about 108 times smaller than the nickel market.
This vast difference in market size suggests that the impact of EV demand on silver prices could be significantly more pronounced than on nickel prices.
Factors contributing to the potential price surge
- Limited Supply: Unlike some other metals, silver mining is often a byproduct of other metal extraction processes, making it challenging to quickly increase supply.
- Diverse Industrial Applications: Beyond EVs, silver is crucial in solar panels, electronics, and other growing industries, further straining supply.
- Investment Demand: As awareness of the supply shortage grows, investment demand for silver as a precious metal could increase, adding to price pressure.
- Technological Advancements: New technologies, like solid-state batteries, may require even more silver per vehicle, potentially exacerbating the supply-demand imbalance.
Market implications
The current silver price, hovering around $30 per ounce, may not fully reflect the looming supply shortage. As the Silver battery market continues to expand and other industrial uses grow, we could see a significant price adjustment in the silver market.
Investors, manufacturers, and policymakers should be prepared for potential supply chain disruptions and price volatility in the silver market. Companies reliant on silver for their products may need to secure long-term supply agreements or explore alternative technologies.
The silver market appears to be on the cusp of a major shift.
We may now experience "Silver Wars" between industry sectors. (Military, Aerospace, Solar, Electric engines) all competing for the #1 conductor of energy… SILVER
The combination of surging demand from the EV sector, limited supply flexibility, and silver's critical role in various emerging technologies suggests that current prices may be undervaluing the metal's future prospects. As the market begins to price in these factors, we will see a massive explosion in silver price and a sustained increase in silver prices in the coming years.
Money Metals Exchange and its staff do not act as personal investment advisors for any specific individual. Nor do we advocate the purchase or sale of any regulated security listed on any exchange for any specific individual. Readers and customers should be aware that, although our track record is excellent, investment markets have inherent risks and there can be no guarantee of future profits. Likewise, our past performance does not assure the same future. You are responsible for your investment decisions, and they should be made in consultation with your own advisors. By purchasing through Money Metals, you understand our company not responsible for any losses caused by your investment decisions, nor do we have any claim to any market gains you may enjoy. This Website is provided “as is,” and Money Metals disclaims all warranties (express or implied) and any and all responsibility or liability for the accuracy, legality, reliability, or availability of any content on the Website.
Recommended Content
Editors’ Picks
![EUR/USD slides toward 1.1100 as USD recovery continues](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/money-9377516_XtraSmall.jpg)
EUR/USD slides toward 1.1100 as USD recovery continues
EUR/USD stays under bearish pressure and declines toward 1.1100 on Wednesday. The cautious market mood, as reflected by the mixed action seen in Wall Street, supports the US Dollar and forces the pair to stay on the back foot.
![GBP/USD drops below 1.3200 on renewed USD strength](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/GBPUSD/cash-334064_XtraSmall.jpg)
GBP/USD drops below 1.3200 on renewed USD strength
GBP/USD struggles to hold its ground and trades below 1.3200 on Wednesday, undermined by a broad US Dollar rebound. Markets turn anxious ahead of speeches from the BoE and the Fed policymakers later in the day.
![Gold struggles to retain the $2,500 mark](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/gold-nuggets-7636265_XtraSmall.jpg)
Gold struggles to retain the $2,500 mark
After falling toward $2,490 earlier in the day, Gold staged a rebound and trades above $2,500. Renewed US Dollar strength and US Treasury bond yields' resilience, however, caps XAU/USD's upside.
![Nvidia Q2 Earnings Preview: All eyes on NVDA after close](https://editorial.fxstreet.com/images/Markets/Equities/Industries/Semiconductors/pic-man-repairing-semiconductors-637435354060707899_XtraSmall.jpg)
Nvidia Q2 Earnings Preview: All eyes on NVDA after close Premium
The moment is almost here. Despite a number of showstopping earnings calls this season, everyone has been waiting for Nvidia (NVDA) to release fiscal 2025 Q2 results, which finally arrive after the closing bell on Wednesday.
![Three fundamentals for the week: Focus on the fragility of the US economy](https://editorial.fxstreet.com/images/Macroeconomics/EconomicIndicator/Employment/NFP/american-dollar-bills-on-a-stars-and-stripes-flag-28691402_XtraSmall.jpg)
Three fundamentals for the week: Focus on the fragility of the US economy Premium
US Consumer confidence data will provide a gauge of how consumers are feeling. Jobless claims are in focus after Fed Chair Powell's dovish speech. Investors will look to the core PCE index to confirm that inflation is falling.
![Moneta Markets review 2024: All you need to know](https://editorial.fxstreet.com/images/IT/Testing/Review/FXSBadgeCertifiedBackg_XtraSmall.png)
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.