Why Are Catalytic Converters So Expensive? (Top 10 Reasons)

You may have noticed there has been a recent string of thefts of catalytic converters from people’s cars.

It may make you wonder what’s in a catalytic converter that makes it so valuable.

Catalytic converters play an important role in the exhaust and emissions systems of your car.

Without a catalytic converter, your car would be producing far more carbon monoxide and smog.

It’s a valuable part of your car both for ethical reasons and for the parts that make up the converter.

Here are 10 reasons catalytic converters are so expensive.

Why Are Catalytic Converters So Expensive? (Top 10 Reasons)

1. Platinum

One of the important parts that make up a catalytic converter is platinum.

The catalytic converter uses various precious metals like platinum to change the state of certain emissions from your car.

They act as catalysts in the chemical reaction, which is vital.

A catalyst isn’t used up in a chemical reaction.

It gives the reaction its “spark” instead.

That’s important because, otherwise, your car would need to constantly be refilled with precious metals.

Owning a car would become even more expensive.

While you will likely need a converter replacement eventually, especially if you use your car for a long time, those who change out their cars over the years will likely never have to deal with converter replacements.

Platinum plays an important role in the conversion of carbon monoxide to carbon dioxide and water.

If you ever looked at your exhaust pipe and saw water dripping from it, that’s because your catalytic converter is doing its job.

Platinum mixes with either palladium or rhodium to perform this chemical reaction.

It adds a hydrocarbon to the chemical reaction which converts monoxide to dioxide.

That means from one molecule of oxygen to two in the chemical chain.

Platinum is an expensive material.

It’s extremely dense, which is what makes it expensive.

On average, only 160 tons of platinum are mined in a year.

Compare that to something like gold, which has 1,500 tons mined in a year.

Since platinum is so rare, and there’s a high demand for it in various parts of the world and various industries, it’s extremely expensive to buy it.

It’s also heavy.

Platinum is dense, even denser than gold.

Since it’s so dense, it weighs more than other materials.

The industry bases the value of metal on its weight.

Since platinum is heavier than other metals, it’s valued at a higher cost.

That makes using it in something like your converter pricey.

It’s also why some people are stealing catalytic converters.

They want access to the precious metal inside of them to resell it on the black market.

Without platinum, however, there would be a considerably increased amount of carbon monoxide released into the environment.

2. Palladium

Another important part of the catalytic converter is palladium.

It mixes with platinum to change carbon monoxide into carbon dioxide and water.

Palladium has a value higher than both gold and platinum.

You can often find it selling for $2,000 per ounce or higher.

Compared to the other precious metals, palladium has always sold higher.

Part of that is because it’s rare in the world.

Palladium is actually a by-product of mining platinum or nickel.

That makes it hard to accumulate.

The demand for palladium is also high.

Many states are starting to increase the restrictions on emissions from cars.

With tighter restrictions come catalytic converters that need to perform better.

That means more and higher-quality palladium.

With many people in the auto industry needing it, the demand for palladium only rises.

It’s also used in the jewelry sector and the electronics sector.

Since supply is so low, especially with closed mines due to the global pandemic, the price of palladium has skyrocketed.

The good news is that the world is slowly turning towards electric vehicles.

Since EVs don’t expend emissions, the need for catalytic converters comes to a halt.

That also means the demand for palladium will decrease which might reduce its price.

Until then, you can expect your catalytic converter to be expensive because of the rarity and scarcity of palladium.

3. Rhodium

Rhodium is another precious metal that plays a part in the catalytic converter.

In particular, rhodium oxidizes nitrogen so that it becomes nitrogen and oxygen.

NOX pollution is one of the most critical parts of an emissions test.

While some federal standards let NOX levels side, at the state level, many manufacturers have had to produce more efficient catalytic converters to meet their NOX standards.

NOX is another way of saying smog.

Rhodium reduces the amount of smog that a car produces.

This is an important measurement for cities that are trying to reduce their carbon footprint and climate change.

The problem with rhodium is that it’s expensive.

Rhodium is another precious metal that is rare in the world.

Only South Africa and Russia mine it.

Thanks to the global pandemic, most mines are either shut down or working at decreased productivity.

That means the mines are producing significantly less rhodium in a year than they would normally.

Despite the minimal supply, the demand for it has only increased.

Automakers are pushing for greener cars.

That’s in large part because states are pushing for greener cars.

If automakers want their cars to be compliant, then they need to invest in their catalytic converters.

That means investing in expensive precious metals like rhodium.

While rhodium used to be cheaper than other precious metals, it has since become the most expensive.

In the past year alone, rhodium has seen a 70% increase in its value.

It went from selling at $3,000 per ounce to $17,000 per ounce in a single year.

Another reason for the scarcity is the producers are keeping it that way.

They know that the demand for rhodium will eventually decrease.

To keep the value high, they’re only releasing a small amount of it every year.

South Africa, in particular, hasn’t opened a new rhodium mine in years despite the increase in demand.

Your catalytic converter is expensive because it needs rhodium to reduce smog levels.

Rhodium, at its current value, is extremely expensive which makes using it in a catalytic converter expensive.

To make up for their cost, manufacturers have to increase the price of the catalytic converter.

4. Cerium

While not the most expensive rare metal used in catalytic converters, cerium still plays a part in making them expensive.

Cerium is the second stage in which emissions go through the converter chamber.

It coats the inner layer of the chamber and helps store oxygen.

The oxygen is later used with platinum and palladium to convert carbon monoxide to carbon dioxide.

It receives the extra oxygen from the cerium layer.

Without the cerium layer, the platinum and palladium properties would be unable to perform this chemical reaction.

Cerium is the most abundant of rare metals in the world.

Despite its abundance, the mining of this metal is still expensive and difficult.

The cost of cerium averages around $1,000 an ounce and above.

If you’re using a lot of it to make your catalytic converters, then it’s going to become expensive.

The global pandemic has also played a role in the rising cost of cerium.

With many mines closed or at low production levels, there’s less cerium in the market.

Even though it’s abundantly found, that doesn’t mean that it’s being abundantly mined.

As the supply decreases and the demand continues to rise, the price for cerium also rises.

If the price for cerium climbs too high, then you can expect your expensive catalytic converter to be even more expensive.

5. CARB Certification

CARB stands for California Air Resources Board.

They test and certify certain products that contribute to air pollution.

They have a stringent set of standards.

That’s because California has a serious problem with air pollution.

They’re also one of the leading states in green technology and reducing pollution.

Their standards are often higher than the federal government’s standards for air pollution.

Because of that, many auto manufacturers look to their certification standards to make their catalytic converters.

The thinking is that if it passes California’s certification, then it will pass certification in almost every other state.

Those who use the federal standards tend to make discount catalytic converters.

The problem with discounted catalytic converters is that those who use them may find themselves with a fine for NOX emissions.

That can be far more expensive than your catalytic converter, especially if you need to end up replacing anyway to avoid repeated offenses.

The problem with certification from CARB is that it costs some money to go through the process.

It also means that automakers need to use high-quality materials and the very best practices to produce converters that will meet their standards.

If you see a catalytic converter with CARB certification, then you can expect it to be expensive.

The positive side is that you can also be sure that the converter will help reduce both carbon monoxide and NOX emissions.

That may help you avoid citations if you live in a state that has strict NOX regulations.

6. Difficult Engineering

Making catalytic converters isn’t easy.

It requires specialized engineers who understand both mechanical and chemical engineering.

They need to understand how chemical reactions work and then how to implement those chemical reactions in a mechanical device.

It also needs to work alongside the rest of the combustion system.

Since most states are demanding better performance in reducing emissions, engineers are constantly looking for new ways to make converters better.

That costs money.

These specialized workers earn high pay.

To pay them, automakers have to price their converters accordingly.

The process of making a converter also takes time.

If something goes wrong in the process, then they need to buy more expensive materials.

They also have to run the converter through a series of tests to ensure it meets the right standards.

All these steps cost money and take time, which in turn, costs money.

This results in an increased price for the catalytic converter, which makes it expensive for the consumer.

7. Higher Standards

The United States and many other countries have made the promise to reach certain climate change goals.

One of those goals is to make gas engines greener.

That falls on the catalytic converter.

As a result, many local governments are leaning on automakers to make better converters.

To do so, automakers need higher-quality materials.

That comes at a steep price.

While there may be a new design for a catalytic converter eventually, the current model relies on expensive, and rare, precious metals.

To meet the standards, automakers have to keep investing in pricey rare metals to make better converters.

The result is a high-priced catalytic converter.

8. Increase In Demand For Converters

A lot of people are turning from diesel engines back to gasoline-powered engines.

That’s because diesel engines aren’t as environmentally friendly as their manufacturers led people to believe.

With the return to gas-powered engines, more people need catalytic converters.

As a result, they need more precious metals to make them.

As demand for converters rises, and supply remains about the same for its parts, the price to make converters also increases.

As a result, the final price tag for a catalytic converter is expensive.

9. Global Pandemic

There’s no question that the COVID-19 pandemic has also contributed to the rise in the price of catalytic converters.

It has decreased supply by forcing mining facilities to shut down or reduce their production.

It’s slowed shipping which has made shipping costs more expensive.

It’s also slowed down or stopped factories that make catalytic converters.

With all these steps in the process slowed or stopped, it’s resulted in a shortage of catalytic converters.

With demand still there as people need to replace or repair their converters, but supply dwindling, the price for them increases.

The problem with the pandemic is that it isn’t causing these problems for a short-term duration either.

It will likely take several years for the supply and demand process to reach a balance again.

Mining facilities and factories need to cover the deficit, and that can take a long time to do.

10. Theft

Due to the price of the precious metals found in the catalytic converters, some people have decided to steal them from cars.

By doing so, they believe that they can extract the precious metals from the converter and sell them on the black market.

With the rare metals often selling for around $50 an ounce, it’s understandable why some desperate for money may engage in thievery.

The problem is that’s also contributing to the overall cost of a converter.

With thefts occurring, that only exacerbates the demand problem.

This increases the demand for converters at a time when supply can’t meet the demand.

The result is an increase in price for converters, particularly in the areas where theft is increasing.

How To Save Money On Catalytic Converters

It’s difficult to save money on catalytic converters because the prices are set at the market value for precious metals.

However, there are a few things you can do to help reduce the need for a converter replacement and keep from needing to buy a new one altogether.

Follow these tips to help you save money on catalytic converters.

1. Choose Discounted

There are two main types of catalytic converters.

There are those that follow the federal standards for air pollution and those that follow the CARD standards for air pollution.

Those who follow the federal, or EPA, standards are cheaper.

That’s because they have lighter restrictions on NOX levels.

As a result, the catalytic converters need to use less precious metal in their construction.

That makes it cheaper.

Those who follow the CARB standards need to ensure they’re producing as little NOX pollution as possible.

That means it needs more precious metal in its construction.

The result is a higher price.

If your state allows you to follow the EPA’s standards for your car’s emissions, then you can buy a discounted catalytic converter with an EPA rating rather than a CARB rating.