Is Silver the New Gold? Why Silver Prices Are Set for Long-Term Growth

Silver has been on an unstoppable rally, reaching unprecedented prices in 2025. By the end of the year, silver prices touched $70 per ounce, more than double what they were at the beginning of the year. To put this into perspective, while the Nifty 50 index returned around 6-8% in 2025, silver’s return soared 150%+ year-to-date. This dramatic surge is not just a market anomaly; it's driven by real demand and supply constraints. What’s behind this surge? The answer lies in a combination of rising industrial demand, tight supply, and renewed investor interest. In this blog, we’ll break down the key factors that are pushing silver prices higher and why this trend could continue in the future.

The Growing Demand for Silver in Electric Vehicles (EVs).

One of the primary drivers behind the rise in silver prices is the electrification of transportation, particularly through the growing demand for electric vehicles (EVs). As the world increasingly shifts from traditional gas-powered vehicles to electric vehicles, the demand for silver is expected to skyrocket. But why exactly are EVs using so much more silver than internal combustion engine (ICE) vehicles? To answer that, we must first understand how silver is used in EVs and the significant changes the automotive industry is experiencing.

How Silver is Used in Electric Vehicles
Silver is a critical component in the production of electric vehicles. The primary reason for higher silver usage in EVs compared to gasoline-powered cars is the complex electronic systems that power electric vehicles. These systems require high-conductivity materials like silver to ensure optimal performance.

Electronic Control Units (ECUs):
EVs are equipped with multiple electronic control units (ECUs) responsible for handling various functions within the vehicle, such as battery management systems, power inverters, onboard chargers, and the management of electrical currents within the drivetrain. Silver is used in all of these systems because it has the highest electrical conductivity of any metal, making it an essential material for these critical electronic components.

Increased Silver Usage:
A typical gasoline-powered car uses approximately 15-28 grams of silver for its electrical contacts and electronic systems. In comparison, an electric vehicle (EV) requires 25-50 grams of silver. This is due to the higher number of electronic components in EVs, including systems for battery charging, power conversion, and energy management. These added features demand more silver to ensure efficient electrical performance.

The Shift from Internal Combustion Engine (ICE) Vehicles to Electric Vehicles (EVs)
The transition from internal combustion engine (ICE) vehicles to electric vehicles (EVs) is one of the major trends shaping the future of the automotive industry. As more people adopt EVs, the demand for silver from the automotive sector is expected to rise significantly. But what is driving this shift?

Accelerated Shift Post-COVID:
The shift to EVs began slowly but gained significant momentum following the COVID-19 pandemic. While EVs were once a niche market, they have now become a mainstream option for consumers around the world. With growing concerns over climate change and carbon emissions, consumers are increasingly opting for cleaner, greener alternatives to traditional gasoline-powered vehicles. In addition, governments have introduced generous incentives to encourage the purchase of EVs, helping to accelerate the transition.

Government Regulations and Incentives:
Stringent emission regulations have also played a major role in the global transition towards EVs, particularly in regions like Europe and North America. Governments are pushing for more stringent fuel economy standards and carbon emission reductions, which has forced automakers to shift toward electric powertrains. In Europe, for example, the European Union’s Green Deal and the UK's ban on new petrol and diesel cars by 2030 have accelerated the shift toward electric mobility.

The Future of EVs: Growth and Increased Silver Consumption
The future of the electric vehicle market remains bright, with EV adoption rates expected to continue climbing despite current challenges. In fact, the global EV market is forecast to grow at a compound annual growth rate (CAGR) of 13% between 2025 and 2031, which will further boost silver demand. As electric vehicles (EVs) become the dominant force in the automotive industry, their higher silver consumption will have a lasting impact on silver demand dynamics.
Rising Silver Demand from EVs:

On average, battery electric vehicles (BEVs) consume 67–79% more silver than traditional internal combustion engine vehicles (ICEs). This is primarily due to the increased number of electronic components in BEVs, as well as the need for battery management systems and high-power inverters. As the global EV production increases, the amount of silver consumed by the automotive sector is set to rise dramatically.

Silver Demand in the Automotive Sector:
As the shift to EVs accelerates, global silver demand from the automotive industry is expected to grow at a CAGR of 3.4% from 2025 to 2031. By 2027, electric vehicles (EVs) are forecast to overtake internal combustion engine vehicles (ICEs) as the primary source of silver demand from the automotive industry. By 2031, EVs will account for approximately 59% of the automotive sector’s total silver demand.

This increased silver consumption from the automotive sector is not limited to just the vehicles themselves. The charging infrastructure required to support the growing number of EVs will also contribute to higher silver demand, as charging stations need electrical components like connectors and power electronics, which are silver-rich.

Technological Advancements in EVs:
The growing sophistication of vehicles, especially EVs, is expected to further increase silver demand. As technological advancements continue, there is a rising number of safety features (like rearview cameras, radar sensors, and smart displays) that require silver for efficient electrical connections. The move towards autonomous driving is another factor that will boost silver demand, as self-driving cars require additional sensors and advanced electronics. This growth in vehicle sophistication will result in higher silver consumption per vehicle, pushing up silver demand from the automotive sector.

The Role of Samsung’s Solid-State Battery in Silver Demand
Now, let’s explore how a new technology, Samsung’s solid-state battery, is poised to transform the EV market and further escalate silver demand. This next-generation battery technology uses silver in a unique way, which could dramatically change silver consumption patterns in the automotive industry.

What Makes Solid-State Batteries Special?
Samsung’s solid-state battery uses a silver-carbon composite for its anode, which stores and releases electrical energy in a more efficient manner than traditional lithium-ion batteries. Solid-state batteries offer superior energy density, faster charging, and longer lifespan compared to the existing battery technologies. In fact, solid-state batteries are expected to double the energy density of traditional lithium-ion batteries, providing an impressive 600-mile range per charge with super-fast charging capabilities of just 9 minutes.

The Impact of Silver in Solid-State Batteries:
The major difference with solid-state batteries is their use of silver-carbon composite in the anode. Each solid-state battery cell uses around 5 grams of silver, and since EV battery packs typically contain 200 cells, each battery pack could contain up to 1 kilogram of silver. This is 30 times more silver than the 1-2 ounces of silver currently used in traditional lithium-ion EV batteries.

Impact on Global Silver Demand:
If solid-state batteries make up 20% of global EV production by 2027, the demand for silver from the EV sector could increase by 16,000 metric tons annually, which is more than half of the current global silver production (approximately 25,000 metric tons per year). Even with a more conservative estimate of just 50% adoption of this technology, the demand for silver could exceed current global production levels by 40,000 metric tons. This would create a significant supply gap, potentially pushing silver prices even higher.

Introduction to Solar Power and Silver Demand:

One of the major drivers of rising silver demand is the solar power industry. Silver plays an essential role in solar panels, where it is used for electrical contacts that collect the electricity generated from sunlight. As the world shifts toward clean energy, solar power has been expanding at a rapid rate, and this has directly resulted in a surge in the demand for silver.

Silver’s Critical Role in Solar Panels:
Every time a solar panel is installed, silver is required to create the electrical contacts that collect and conduct the electricity generated by sunlight. This makes silver irreplaceable in the production of solar panels, further driving up its demand as the adoption of solar energy grows worldwide. As we transition to clean energy, solar power's rapidly increasing footprint has created a significant demand for silver, turning it into one of the biggest consumers of silver in recent years.

The Rapid Growth of Solar Power:

The expansion of solar power capacity over the last decade has been nothing short of explosive. Installed photovoltaic (PV) capacity has increased over tenfold, led primarily by China (51% of growth), Europe (15%), and the United States (9%). This global growth in solar installations has directly contributed to a threefold increase in silver demand from the solar power sector.
However, it's worth noting that despite the significant increase in installed solar capacity, silver demand has not grown proportionally, primarily because of technological advancements that have reduced the amount of silver required per solar cell. This process, known as thrifting, has helped lower silver usage even as overall solar capacity continues to expand.

Current Silver Demand from Solar Power:
In 2023, the solar industry consumed an estimated 193.5 million ounces of silver, marking a 64% increase from the previous year. This surge in demand solidifies solar power as one of the world's biggest consumers of silver, and this trend is expected to continue. In fact, solar panels alone could account for 30% of global silver demand by 2030, significantly tightening the silver supply.

The Long-Term Outlook for Solar Power:

Looking ahead, the outlook for solar power remains extremely strong. The International Energy Agency (IEA) forecasts that solar energy will become the dominant renewable energy source globally by 2030. This optimistic outlook is supported by ambitious solar capacity goals set by governments around the world, many of which include supportive funding and policies aimed at boosting solar adoption.

Solar capacity is projected to grow at a compound annual growth rate (CAGR) of 17% through 2030. This growth is driven by strong government support, even though recent U.S. subsidy cuts and trade tariffs may negatively impact solar module costs. Nevertheless, experts believe that solar costs will continue to fall, making solar power increasingly cost-competitive, independent of government support.

Technological Developments and Their Impact on Silver Demand:
While technological advancements have led to reduced silver requirements in some solar cells, this trend is being offset by the development of next-generation solar cells. New technologies such as TOPCon (Tunnel Oxide Passivated Contact) and SHJ (Silicon Heterojunction) solar cells actually require more silver to improve the efficiency of the panels.
Despite these advancements, thrifting is still a significant factor in lowering silver usage in solar cells. However, copper plating technologies, which are being developed to further reduce silver usage in solar cells, could play an important role in the future. While these copper plating technologies currently make up a minimal portion of global sales, experts believe that they will become a larger part of the market in the coming years, gradually decreasing silver demand per solar cell.

Silver’s Role in Electronics and Data Centers

Data centres form the backbone of the digital economy, providing the essential infrastructure to run cloud computing services, store and manage data, and increasingly power artificial intelligence (AI) systems. As digitalisation and AI adoption accelerate across industries, the demand for materials critical to their functioning particularly silver is expected to soar. Silver’s superior electrical conductivity makes it indispensable for producing semiconductors, circuit boards, and power supplies that underpin all forms of modern electronics.
Over the past two decades, global IT power capacity has surged dramatically, rising an estimated 53 times from about 0.93 GW in 2000 to nearly 50 GW in 2025. Even without exact estimates of silver usage in IT hardware, the correlation is evident a 5,252% increase in IT power points to a massive expansion in computing equipment, and by extension, a sharp rise in

Governments worldwide are also recognizing data centres as critical infrastructure and have introduced supportive policies such as tax incentives, grants, and fast-track regulatory approvals. Initiatives in regions like the US, UK, EU, and China aim to attract large-scale private investment, expand capacity, and enhance reliability to meet the rapidly rising AI and cloud computing demand further strengthening the outlook for silver consumption.
Almost every device we rely on today, from smartphones and laptops to servers housed in massive data centres, depends on silver for reliable electrical connections. The growing sophistication of AI models requires vast amounts of computing power and specialized hardware, including GPUs (Graphics Processing Units), TPUs (Tensor Processing Units), and NPUs (Neural Processing Units). These high-performance chips incorporate silver in their internal contacts and packaging to ensure efficiency and conductivity. Likewise, the broader electronics ecosystem from autonomous vehicles and industrial robots to edge computing devices relies on silver-rich components to support seamless data processing and transmission.
The evolution of technologies such as 5G and the Internet of Things (IoT) is another crucial factor intensifying silver demand. As billions of connected devices come online and data flows increase exponentially, the need for high-efficiency electronics becomes greater. Together, these trends AI expansion, digitalisation, government incentives, and the proliferation of connected devices are expected to keep silver demand on an upward trajectory. As a result, silver’s role as a strategic industrial metal will continue to strengthen, providing long-term support to its price as the global digital infrastructure scales further.

5. Tight Silver Supply: Why It’s Hard to Increase Production

While demand for silver is growing at an exponential rate, supply is not keeping up. In fact, silver has been in a structural deficit since 2021, meaning the world has been using more silver than is being mined. The total amount of silver mined each year is not increasing fast enough to meet this growing demand.
A major reason for this is that 70-80% of silver is mined as a byproduct of other metals like copper, lead, and zinc. So, if copper prices fall, it can cause silver supply to fall too, even if silver prices rise.

Additionally, silver mines have become harder to find, and many existing mines are seeing declining ore grades. Simply put, the easier-to-find, higher-quality silver deposits are running out, and new silver mines are difficult and expensive to develop. On top of that, there have been political disruptions in major silver-producing countries like Mexico and Peru, which have further constrained supply.
These supply-side constraints are making the silver market more vulnerable to price spikes, especially as demand from green technologies like solar power and electric vehicles increases.

6. What Does This Mean for Silver Prices?
Given the rising industrial demand, especially from EVs, solar power, and data centers, combined with tight supply and potential new technology like Samsung’s silver-based solid-state battery, silver prices could continue their upward trajectory.
Silver’s current price surge is being driven by a combination of demand-push and supply-constrained dynamics. If the adoption of silver-intensive technologies increases as expected, silver demand will only grow. This, in turn, could lead to higher silver prices, potentially surpassing previous records.

Growing demand from electric vehicles, solar and electronics is driving silver consumption.

The emerging technology of solid-state batteries could massively increase silver demand.

Supply-side constraints (limited mining, geopolitical risks) are preventing silver production from keeping pace with demand.

Silver is entering a structural deficit, which could lead to sustained high prices as demand continues to rise.

Conclusion
Silver’s price surge is not a temporary spike; it’s the result of real, long-term changes in technology and industrial demand. With electric vehicles, solar power, and advanced electronics all consuming more silver, coupled with tight supply and technological breakthroughs like solid-state batteries, silver prices are on a path of sustained growth. For investors, silver presents a compelling opportunity, as the demand for this precious metal shows no signs of slowing down.