By Mike Visser | Resource Digest – Mining, Metals & Mobility | April 2025 Edition
The evolution of the automotive industry continues to shape the future of platinum group metals (PGMs), as shifting dynamics in electric vehicle adoption present both challenges and opportunities for stakeholders across the mining and refining spectrum. That was the key message echoed during the 2025 PGMs Industry Day, where experts discussed the current state and outlook of internal combustion engines (ICEs), battery electric vehicles (BEVs), and fuel cell electric vehicles (FCEVs).
A notable theme throughout the discussions was the slowing momentum in BEV adoption. While the transition to cleaner mobility remains underway, the pace is no longer as aggressive as earlier projections suggested — offering a temporary cushion for the PGM industry, which continues to rely heavily on demand from catalytic converters in ICE vehicles.
“The shift is happening — just not as fast as once expected,” said Jakob Fleischmann, partner at McKinsey & Company. “This deceleration provides valuable time for PGM producers to adapt and strategically plan for what’s next.”
Fleischmann highlighted that while BEV growth is still forecast for the future, the current trajectory offers a medium-term runway for continued PGM relevance in the automotive sector.
💡 Value Over Green: Changing Consumer Priorities
Anton Smalberger, Senior Manager for New-Energy Business Development at Toyota South Africa Motors, emphasized a shift in consumer behavior that is also affecting BEV uptake.
“Buyers are no longer primarily motivated by environmental concerns,” Smalberger noted. “Today, it’s about practicality — range, recharge speed, and long-term value.”
He explained that without meaningful government incentives, BEVs remain financially out of reach for many consumers. Moreover, resale values remain relatively low compared to ICE vehicles, further discouraging buyers.
⚡ Hybrid Pathways and New Competition for PGMs
Meanwhile, hybrid electric vehicles (HEVs) — which blend combustion engines with electric support — are gaining ground, creating a nuanced effect on PGM demand. Unlike BEVs, HEVs still utilize catalytic converters and therefore continue to draw on PGMs such as platinum, palladium, and rhodium, albeit in differing proportions depending on the engine design.
Toby Green, Precious Metals Market Analyst at BASF Environmental Catalyst and Metal Solutions, noted that this trend is creating a mixed demand environment for the sector.
“Hybrid technology is extending the life of PGM demand, but it also signals a more complex transition. We’re not just moving from ICE to BEV overnight — we’re entering a period of overlapping technologies.”
Green warned, however, that this reprieve is not a permanent lifeline. While current demand from ICE and hybrid platforms may remain stable for now, long-term planning must factor in the eventual acceleration of zero-emission vehicle (ZEV) policies and infrastructure development.
📈 Strategic Implications for the PGM Sector
The industry consensus is clear: this is a time to optimize — not relax. PGM producers and refiners must stay agile, embracing innovation, supply discipline, and strategic diversification as the automotive sector recalibrates.
“The slowdown should not be mistaken for stagnation,” Fleischmann concluded. “It’s a strategic pause that allows the industry to realign its priorities and prepare for an electrified future.”
Whether through investments in recycling, expansion into fuel cell technologies, or support for emerging markets where ICE vehicles still dominate, the PGM industry must leverage this window of opportunity wisely.
🔍 Quick Insight Box: PGMs and Their Automotive Roles
- Platinum (Pt): Used extensively in catalytic converters for diesel engines and fuel cell vehicles.
- Palladium (Pd): Key material for catalytic converters in petrol engines.
- Rhodium (Rh): Enhances the reduction of NOx emissions in catalytic systems.
- Current Challenge: Balancing near-term ICE support with long-term ZEV transition readiness.
