UBS Has Raised Palladium Price Forecasts
The bank cited ongoing hybrid vehicle demand and supply constraints as factors for the increased price targets.
Updated on Sept. 21, 2026 in Electric Vehicles
Live Poll
Do you expect the cost of vehicles to rise due to ongoing metal supply shortages?
UBS has increased its palladium price forecasts for late 2026 and early 2027 by up to $200 per ounce. The adjustment reflects a tightening physical market driven by supply constraints and a slower-than-anticipated shift toward full electric vehicle adoption.
Why it matters
The sustained popularity of hybrid vehicles continues to support demand for internal combustion engines and the catalytic converters that rely on palladium. These market conditions have led analysts to revise price outlooks upward even as the long-term trend toward electrification remains in place.
UBS raised its December 2026 and March 2027 palladium price targets by $200 per ounce, with an additional $100 increase for the June 2027 forecast. These revisions follow a 2025 period characterized by declines in both global mine production and market demand.
The players
UBS
UBS is a global financial services company that provides investment banking, wealth management, and asset management services.
The details
Global demand for palladium was supported in 2025 by consumers opting for hybrid vehicles, which utilize catalytic converters longer than full electric models. Meanwhile, supply constraints in producing regions have contributed to a tightening physical market.
Timeline
Global palladium demand and production fell during 2025.
Palladium demand is expected to remain stable throughout 2026.
The December 2026 price forecast received an upgrade.
The March 2027 price forecast received an upgrade.
The June 2027 price forecast received an upgrade.
Roadmap
This palladium pricing shift illustrates the complex transition within the automotive industry as consumer preference for hybrids complicates the timeline for full electric vehicle adoption. Manufacturers must continue balancing reliance on internal combustion components against long-term electrification goals.
Drivers may see stable or higher costs for hybrid vehicle maintenance as the demand for palladium-dependent exhaust components remains firm. These price trends also influence the broader cost-of-production for automakers currently navigating between internal combustion and electric lineups.
The takeaway
The sustained demand for palladium underscores how hybrid vehicles act as a bridge technology that slows the transition away from internal combustion. Investors and consumers should monitor these commodity shifts as indicators of how long legacy automotive hardware will remain a dominant market force.
Further reading
For more on how shifting automotive trends impact the supply chain, visit our Electric Vehicles section.
Live Poll
Do you expect the cost of vehicles to rise due to ongoing metal supply shortages?
