UBS Has Increased Palladium Price Forecasts
Investors and buyers should note that slower EV adoption is keeping demand for catalytic-converter metals higher.
Updated on Sept. 21, 2026 in Electric Vehicles
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UBS has raised its price targets for palladium through mid-2027 due to tighter market conditions. This shift stems from resilient demand for internal combustion engines as hybrid vehicle adoption remains stronger than initially anticipated.
Why it matters
The continued reliance on hybrid vehicles sustains the need for catalytic converters, which utilize palladium, effectively tightening the physical market despite the long-term industry shift toward electric transport. These supply constraints and steady usage patterns have prompted financial analysts to revise their future metal price outlooks.
UBS has lifted its palladium price forecasts by $200 per ounce for December 2026 and March 2027, with a $100 increase for June 2027. These updates follow a 2025 period defined by declines in both global palladium demand and mine production.
The players
UBS
A global financial services firm that provides analysis on commodity markets and precious metal price forecasting.
The details
Palladium prices are currently reacting to a tightening in the physical market caused by supply constraints in major producing nations and sustained industrial demand. Because consumers are choosing hybrid vehicles over full electric models, the automotive industry continues to require catalytic converters for internal combustion engines. UBS projects that global mine production will continue to fall in 2026, maintaining pressure on metal prices until electric vehicle adoption fully scales up.
Timeline
Global palladium demand and mine production both declined during 2025.
Global demand for the metal is expected to remain stable throughout 2026.
Price targets were upgraded for December 2026, March 2027, and June 2027.
The Home Front
This palladium market revision illustrates how hybrid vehicle popularity temporarily extends the lifespan of internal combustion technology. It reflects a departure from earlier projections that assumed a faster, linear transition to purely electric fleets.
If you are planning a vehicle purchase, be aware that higher metal costs can impact manufacturing expenses for new vehicles. Keep an eye on hybrid and internal combustion vehicle pricing trends as manufacturers navigate these supply-chain and material-cost realities.
The takeaway
The sustained demand for palladium highlights that the move to electric-only transportation is happening more slowly than previously forecast. Owners of internal combustion or hybrid vehicles should note that their vehicles remain tethered to global precious metal market volatility.
Further reading
For more on the changing landscape of automotive technology, visit our Electric Vehicles section.
Live Poll
Do you expect the cost of vehicles to rise due to ongoing metal supply shortages?
