To reach net zero emissions by 2050, the National Renewable Energy Laboratory recently estimated that they expect electric vehicles in the US alone to reach 186 million on the road, around 66% of all cars. What does this have to do with silver? Well, every electric vehicle contains around 3 ounces of silver, so given these estimates, around a billion ounces of silver will be needed to help build this fleet of cars. As well as being used in electric vehicles, silver is needed for other key enablers of the green economy, from solar panels to batteries – it’s the modern economy metal.

The annual supply of mined silver is around 800 million ounces and currently 70-80% around of that goes to industrial use. Given the structural shortage of available silver and the vital role it will play in the burgeoning green economy, substantially higher silver prices seem inevitable. Across the world, silver mines are maturing, input costs are rising (particularly labour which accounts for around 40-50% of operating costs), and the grade of mined silver is declining (the highest grades of silver are nearer the surface). There is still a fair amount of silver left in the ground, but prices would need to rise considerably for silver miners to optimise extraction and recovery.

Please note: Market and exchange rate movements can cause the value of an investment to fall as well as rise, and you may get back less than originally invested.

 

This communication is intended for investment professionals and is not for the use or benefit of other persons, including retail investors. This document is for informational purposes only and is not investment advice.

 

The views expressed are those of the Fund Manager at the time of writing, are not necessarily those of Jupiter as a whole and may be subject to change. This is particularly true during periods of rapidly changing market circumstances. Every effort is made to ensure the accuracy of any information provided but no assurances or warranties are given. Issued in the UK by Jupiter Asset Management Limited, registered address: The Zig Zag Building, 70 Victoria Street, London, SW1E 6SQ is authorised and regulated by the Financial Conduct Authority. Issued in the EU by Jupiter Asset Management International S.A. (JAMI, the Management Company), registered address: 5, Rue Heienhaff, Senningerberg L-1736, Luxembourg which is authorised and regulated by the Commission de Surveillance du Secteur Financier. No part of this document may be reproduced in any manner without the prior permission of JAM. 27275