THE DERIVATIVES MARKET ROLE IN ADVANCING GREENER ROADS
The transition to a greener economy has been a desire for many countries as new initiatives and EV mandates are ordered across the globe in the quest for carbon neutrality.
However, it is one that is heavily influenced by the stability of prices in the energy and precious metals markets. Due to precious metals vital role in battery production and energy supply for electric vehicles (EVs), they are without a doubt much needed for a world where carbon neutrality is achieved. As such, price volatility in these markets can have significant repercussions on the development and adoption of green technologies, such as EVs. So how can the derivatives market support this sector and contribute to a greener economy?
Today, it has become quite common to see EVs on the road, no matter where you are. The growing demand and market for EVs have been at the forefront of news in light of initiatives aimed at creating a greener world by reducing carbon emissions, the natural evolution of the auto industry to diversify its offerings and the appealing aspects of EV ownership, such as reduced operating and maintenance costs. Some of these global initiatives include government subsidies for EV manufacturers, which reduce production costs and consequently make the cars cheaper for consumers. Additionally, tax credits from governments have created a dynamic collaboration between the private and public sectors to establish an appealing electric auto market for consumers, all in the name of a greener economy.
As a result, consumer sentiment towards EVs has improved dramatically. Through the evolution of the auto market and the proliferation of at- home charging stations, EVs are becoming more appealing and making traditional gas-powered
2010
EV sales made up just 0.01% of total car sales
cars increasingly replaceable. EV demand has been skyrocketing, and growth is still projected to rise. In 2023, EVs accounted for 18% of all new car sales globally, up from 14% the year prior. While only representing less than a fifth of new car sales, it is important to note that in 2010, EV sales made up just 0.01% of total car sales. [EV Sales Statistics | Top
Countries in 2023] [Tracking global data on electric vehicles - Our World in Data]
ENERGY SOURCING - A CENTRAL CHALLENGE Amid the strong growth of the EV market, a central challenge is increasingly making its presence known: energy sourcing. EV charging stations – whether at home or communal - primarily obtain their electricity from the power grid. While cleaner energy solutions such as solar and wind power have become growing energy sources for charging stations, their impact is small in comparison. The U.S. power grid primarily relies on fossil fuels for its energy production, which accounts for about 60% of total energy production while renewable energy sources make up only 21% of the electricity
generation. [Electricity in the U.S. - U.S. Energy Information Administration (EIA)]
Given that the (U.S.) power grid obtains most of its energy from oil products, price spikes in fossil fuels will consequently drive up electricity prices. An effect that can be especially damaging for areas where the grid is more heavily reliant on fossil fuels – especially areas that cannot produce their own oil and thus need to rely on imports, such as Hawaii.
2023
EVs accounted for 18% of all new car sales globally
23 | ADMISI - The Ghost In The Machine | Q1 Edition 2025
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