The growing popularity of hybrid cars is unexpectedly boosting the demand for platinum group metals (PGMs), particularly platinum and palladium, as the uptake of electric vehicles (EVs) begins to slow. This shift in consumer preference is providing a lifeline for PGMs, which have faced a long-term decline due to reduced need in pure EVs, where catalytic converters are unnecessary.
Previously, the outlook for PGMs and major producers such as Anglo Platinum, Impala Platinum, and Sibanye Stillwater appeared bleak as EV sales surged. However, with a slowdown in EV growth—only an 11% increase in the first half of 2024 compared to a 77% surge two years ago—and a significant 44% rise in plug-in hybrid electric vehicle (PHEV) sales, PGMs are witnessing renewed demand.
Marcus Garvey, head of commodities strategy at Macquarie Bank, noted that while there is still an overall decline in demand for PGMs, the immediate collapse previously projected is not occurring. The resurgence in hybrid car sales, which require catalytic converters to reduce emissions, is helping to stabilize prices and prolong the operational lifespan of certain mines.
Popular PHEV models contributing to this trend include BYD’s Song and the BMW 3 Series.