How Will President Biden’s Push for Electric Cars Affect the Price of Precious Metals?
If you’ve been following the news this week, you know that President Biden signed an executive order stating that by the year 2030, between 40% and 50% of all new cars sold in the U.S. must be electric.
When we dug in and took a closer look at what that order requires, we discovered some aspects of it that are nothing short of amazing.
“Electric” means all electric cars (powered only by batteries and electric motors), hybrids (which have small gas engines that both move the car and recharge battery packs that also can power the vehicles), and plug-in hybrids (which function as electric cars until the batteries are drained when small gas motors kick in and take over).
Somewhat surprisingly, President Biden’s definition of an “electric” car also includes hydrogen fuel cell cars, which aren’t exactly electric cars. In these cars, hydrogen passes through platinum catalysts that then produce electricity, which then powers electric motors that move the car. So these cars are sort of a hybrid that burns something (hydrogen) and scoots around using electrical power. Another way of looking at it is that fuel cell cars are electric cars, but that the electricity they use comes from burning hydrogen, not from batteries that need to be recharged.
Currently, only about 2% of all cars sold in America are “electric,” meaning that they fall into the categories we described just above. Considering that 17 million cars and trucks were sold in the U.S. in 2019, that means that requiring that between 40% and 50% of all new cars sold be electric (in some form) means a staggering increase in the number of those vehicles in less than a decade.
Note that that 40% to 50% applies to the number of vehicles that will be sold in the U.S. It does not mean that all those vehicles need to be manufactured here. So electric cars (of all kinds) made in Asia, Europe, as well as in the U.S. will make up 40% to 50% of sales.
The Biggest Change in the History of the Automobile Is about to Happen
Let’s face the fact that we are about to see a change that will be unlike anything we have ever seen before. And we are going to see it happen quickly.
To say that our heads will spin is probably an understatement. But you, as we are, are probably wondering how all this change will affect the trading prices of gold, silver, platinum and other precious metals. Another question that is connected to that last one is, how will all this change affect the demand and the availability of precious metals? We know, after all, that the price of precious metals goes up when the demand for them increases.
It’s about to be a chaotic time, but one that could offer rich rewards for investors who can understand the trends, make smart predictions, and make smart investing decisions at the right time.
What Are the Trends?
So, what could those changes be, and what opportunities could they offer?
The demand and price of platinum will stay strong, even though platinum will be used in different ways. The use of catalytic converters with internal combustion engines will decline, but the need for platinum could eventually be counterbalanced by the need for platinum that will be used in fuel cell cars. What kind of numbers are we talking about? We don’t know, we will all just have to keep watching and stay tuned.
The need for gold and silver will probably increase, simply because all varieties of future electric cars will be packed with circuitry. And circuitry of all kinds is made with gold – as well as small quantities of silver and also base metals like copper.
A big push to create recharging stations for electric cars (and later, to create hydrogen fueling stations for fuel cell cars) will create a second wave of big demand for electronic units that will also use a lot of gold, silver, and base metals.
Some people are probably going to keep driving their gas-powered cars for as long as they possibly can. That means that recovery of the gold, silver and base metals they contain could stall for a time. However, we can also predict that the day will come when lots of old gas-powered and even gas/electric hybrid cars will start to wash back into automotive recycling yards. When? Maybe about 15-20 years from today. At that point, recovering the precious metals they contain could become a very profitable way to invest.
Lithium, nickel and cadmium will be needed more and more in batteries. We are not only entering the age of electric cars, we are entering a new age of batteries too. As the demand for everything that goes into batteries increases – lithium, nickel and cadmium – look for those materials to increase in value. They could be the precious metals of the future.
A Big Trend that Could Affect the Value of Platinum
For the last decade, scientists have been actively trying to reduce the amount of platinum that is used in catalysts. Why? Simply because platinum is worth a lot of money and if it can be replaced with something cheaper, big savings would result. Those scientists have been reducing the amount of platinum and increasing the amount of sodium and other materials.
There is even talk of eliminating platinum entirely from catalysts of many kinds, including industrial catalysts and the catalysts that are used in hydrogen fuel cells.
Keep an eye on this trend! If platinum will be replaced by other metals in catalysts, its value could drop slightly.
What Trends Do You See?
As we noted earlier in today’s post, we are about to enter into a period of explosive change in the world of precious metal investing.
Remember that whatever kind of precious metals and precious metal scrap you have, we are here to test it and recycle it for you. We expect to see a period of unprecedented opportunities for everyone who invests in precious metals. If you would like to join us and profit during the coming period of opportunity, call us today at 800-426-2344.
Related Posts
Hydrogen Fuel Cell Trends that Could Earn You Money Soon
Five Reasons Why Smart Investors Are Betting on Hydrogen Fuel Cells Today
A Quick History of Hydrogen Fuel Cell Cars of Yesterday and Today
The Coming Boom in Hydrogen Fuel Cell Recycling
What You Need to Know to Make Money Recycling Platinum-Rhodium Scrap