The slowdown in sales of electric vehicles worldwide has prompted Coronation Fund Managers Ltd. to take a fresh look at South African producers of precious metals used in traditional gasoline engines.

Coronation, the country’s third-biggest private fund manager with about R667-billion in assets, is buying stocks in beaten-down platinum miners even as it reduces holdings of the metal itself, according to Nicholas Hops, who runs the Coronation Resources Fund with Nicholas Stein.

The Cape Town-based firm has added shares of Impala Platinum Holdings and Northam Platinum Holdings in recent months, betting that demand for the metal, used in exhaust systems of internal-combustion engines, will remain robust, Hops said in an interview. While both stocks have rallied this year, they still offer value after years of decline, he said.

EV sales are still rising globally, but the rate of growth is slowing as China’s economy continues to struggle, while the subsidies and tax breaks that helped drive sales are drying up in Europe and the US. Global passenger EV sales rose 24% in 2024, down from 33% the previous year and more than 100% in 2021, according to BloombergNEF.

“We’re still heading toward battery electric vehicles being a dominant player in the global automotive market but perhaps the ramp up is a little bit longer that one might have once expected,” Hops said in an interview. That’s “extending the useful lives of precious metal-containing vehicles,” he said.

The firm has increased the weighting of Impala Platinum in its Resources Fund to 7.8% from zero and raised Northam Platinum to 10.6% from 9.6%. Impala has gained 32% this year and Northam is up 25%. Still, both stocks remain well below their 2021 peaks.

“The selloff in platinum equities over a two- to three-year period was so big, that we decided by the latter part of last year that the stocks started to offer a lot of value again,” Hops said.

Coronation’s R1.4-billion Resources Fund has delivered an annualized return of 27% over the past five years, compared with 20% for the benchmark and 23% for peers, according to data compiled by Bloomberg.

While the price of platinum has risen about 10% this year, Coronation has reduced its holdings of the physical metal as the risk-reward favors the equities, Hops said. Platinum stocks have outperformed the rise in the metal’s price this year.

With the platinum market seen remaining in deficit in 2025 for a third consecutive year, according to the World Platinum Investment Council, demand for the metal will remain robust.

In addition, North American producers including Sibanye Stillwater Ltd. are restructuring their mines and cutting output of platinum-group metals, which will also favor local producers, Hops said.