North American automotive OEMs: How to protect margins in a volatile raw materials market

Fastmarkets04-24

Key takeaways: Raw‑material volatility is squeezing original equipment manufacturer (OEM)margins: Electrification, regionalization and regulation are increasing exposure to volatile steel, aluminium ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNorth American automotive OEMs: How to protect margins in a volatile raw materials market\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-04-24 12:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fastmarkets.com/insights/north-american-automotive-oems-how-to-protect-margins-in-a-volatile-raw-materials-market/><strong>Fastmarkets</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Key takeaways:\n\nRaw‑material volatility is squeezing original equipment manufacturer (OEM)margins: Electrification, regionalization and regulation are increasing exposure to volatile steel, aluminium ...</p>\n\n<a href=\"https://www.fastmarkets.com/insights/north-american-automotive-oems-how-to-protect-margins-in-a-volatile-raw-materials-market/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4585","symbol_name":"ETF&股票定投概念","start_time":0,"source_url":"https://www.fastmarkets.com/insights/north-american-automotive-oems-how-to-protect-margins-in-a-volatile-raw-materials-market/","article_id":"2630254548","we_media_id":null,"thumbnails":[],"rights":{"source":"fastmarkets_highlight","url":"https://www.fastmarkets.com/insights/north-american-automotive-oems-how-to-protect-margins-in-a-volatile-raw-materials-market/","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2630254548","pubTimestamp":1777003200,"columns":[],"sourceInfo":{"source_id":"fastmarkets_highlight","name":"Fastmarkets"},"weMediaInfo":null,"summary":"North American automotive OEMs are navigating one of the toughest cost pressures today: raw material volatility. As supply chains become more localized through USMCA, the IRA, and reshoring, manufacturers continue to face rising material price risks.","collect":0,"end_time":0,"defaultTopTitle":"fastmarkets.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4585":"ETF&股票定投概念","AFG":"美国金融集团有限公司","BK4535":"淡马锡持仓","BK4588":"碎股","BK4117":"多元化保险","XME":"金属与采矿指数ETF-SPDR","BK4544":"ARK ETF合集","BK4107":"财产与意外伤害保险","ARKG":"ARK Genomic Revolution ETF"},"translate_title":"北美汽车原始设备制造商：如何在动荡的原材料市场中保护利润","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"ARKG":1.5,"XME":0.7,"AFG":1.5},"content_text":"Key takeaways:\n\nRaw‑material volatility is squeezing original equipment manufacturer (OEM)margins: Electrification, regionalization and regulation are increasing exposure to volatile steel, aluminium and battery material prices. \nReshoring doesn’t eliminate risk: Localizing supply chains can reduce logistics issues, but often leads to tighter supply, regional price premiums and greater exposure to policy and tariff changes. \nData-driven procurement is now essential: OEMs need independent benchmarks, forward-looking forecasts and regional cost comparisons to protect margins and maintain negotiating power. \n\nThe margin squeeze facing North American OEMs\nNorth American automotive OEMs are navigating one of the toughest cost pressures today: raw material volatility. As supply chains become more localized through USMCA, the Inflation Reduction Act (IRA), and reshoring, manufacturers continue to face rising material price risks.  \nElectrification is accelerating exposure to battery materials, low-carbon metals and energy-intensive inputs, which add new layers of uncertainty and complexity.  \nNow, more than ever, manufacturers need clear visibility, smarter forecasting and strong negotiation leverage to safeguard margins and drive future growth. \nWhy raw-material volatility hits automotive margins hard\nThe shift toward electrification means greater dependence on commodity-linked components like battery materials and low-carbon metals. This dependence exposes OEMs to price swings amplified by trade policies, regional supply constraints and new decarbonization mandates.  \nFor instance, steel and aluminium prices are now heavily impacted by the IRA requirements and supply-chain restrictions, leading to fragmented pricing across regions.  \nWhile the Carbon Border Adjustment Mechanism (CBAM) does not directly raise input costs for most US auto manufacturers, it is influencing global trade flows and carbon-linked pricing, with indirect effects on cost structures over time. \nThe localized supply chain myth\nReshoring is often seen as a solution to global supply chain challenges, but bringing sourcing, processing or manufacturing back home introduces new challenges; it cannot fully shield OEMs from volatility. \nWhile domestic sourcing can reduce logistics issues, it introduces fresh challenges, tight supply, regional price premiums and vulnerability to local policy changes. As we have witnessed, tariffs and trade disputes can quickly offset the intended stability.  \nTo effectively manage risk and protect margins, OEMs must balance domestic sourcing mandates with dynamic regional benchmarking and predictive tools that guide strategic decisions. \nKey raw material pain points for North American manufacturers\nSteel\nRegional price spreads on steel are widening, fueled by tariffs on imports that have enhanced pricing power for domestic giving them an expected 4-5% expansion in shipments this year.\nWhile domestic steelmaking capacity is increasing, demand for domestic steel is rising more. General Motors is onshoring its Buick Envision from China, and Ford and Stellantis are making major investments to expand US domestic automaking production.\nFigure 1 shows how the US Midwest HRC premium over both European and Chinese export prices has persisted throughout the year, with all three markets trending modestly upward from mid-2025 lows into early 2026. \n\nFigure 1:  HRC price comparison: US, European and Chinese indices, Apr 2025 – Apr 2026.\nSteelmakers are facing rising material and labor costs, which they are passing on to customers. As more of the market moves to long-term contracts, companies must access independent benchmarks to maintain leverage in negotiations. Without them, fluctuating costs and shifting market dynamics complicate budgeting and forecasting. \nUS steelmaker, Nucor, is expected to gain an increasing market share of the country’s steel consumption and to increase shipments year on year by about 5% in 2026. Of that total, Nucor expects a 4% increase in shipments due to gains in market share from imports and 1% growth in US end markets. \nOther steelmakers have offered similar guidance on shipments for 2026. \nThe increase would be in part due to demand sector growth in primary end markets, including infrastructure, data centers, energy and energy infrastructure, as well as “heavy demand related to advanced manufacturing in the [US] border fence,” Leon Topalian, chairman of the board and chief executive officer, said.  The nation’s largest steelmaker, however, has not yet seen “much improvement from interest-rate sensitive markets, such as automotive and residential construction.”  Nucor attributes its gain in market share formerly held by imports to the impact of Section 232 tariffs driving prices higher and making them uncompetitive. \nAluminium\nAluminium, especially low-carbon varieties, comes with complex regional premiums.  \nCurrently, USMCA requires at least 70% of the aluminium content of automotive parts to originate in the US, Canada and Mexico to be considered a North American product under the agreement’s rules of origin. \nWeight-reduction and efficiency targets add pressure, as does the need to comply with tightening CO₂ standards. Success requires reliable data on regional price trends and a sharp focus on sustainability. \n“The global aluminium market has been shaken by tariff driven policies, escalating geopolitical tensions in the Middle East, and renewed uncertainty as smelters grapple with rising energy costs. In this environment, understanding where LME aluminium prices and premiums are headed becomes an essential tool for navigating an increasingly turbulent market landscape.” Andy Farida, Fastmarkets senior analyst. \nBattery materials (lithium, nickel, graphite, manganese, cobalt)\nWith the rapid growth of EVs, a stable battery material supply is critical. Yet markets for lithium, nickel and cobalt remain volatile, with price swings driven by global demand and supply chain bottlenecks.\nFigure 2 demonstrates how cobalt standard grade (MB-CO-0005) dropped from around $20/lb in April 2025 all the way down to roughly $15/lb by mid-summer before recovering strongly to $26+/lb by early 2026, a swing of over 70% across the period.\n\nFigure 2: Price comparison of key battery raw materials from April 2025 to April 2026.\nAutomaker, Ford Motor Company, announced on December 15 that it is taking a $19.5 billion charge off for EV investments and new vehicle development to hybrids, but will continue to sell smaller, profitable EVs, as well as popular ICE vehicles. \n“This is a customer-driven shift to create a stronger, more resilient and more profitable Ford,” Jim Farley, the automaker’s president and chief executive officer, said. \nFord expects hybrids, extended-range EVs and full electric vehicles combined to represent 50% of its production by 2030, up from 17% in 2025. \n\nFigure 3: Forecasted percentile share of sales of US EV, HEV and ICE vehicles. \nOEMs must track key metrics like gigafactory builds, precursor material supplies and indexes that reflect real-world costs. These strategies help maintain pricing stability and a competitive edge in the EV market. \nHow automotive OEMs can protect margins: data-driven strategies\nLeverage independent benchmarks for negotiation\nData is essential when negotiating auto-grade steel, aluminium or battery material contracts.\nIndependent benchmarks, offering both real-time and historical pricing, enable fact-based discussions and help avoid getting locked into unfavorable, opaque cost-plus models.\nUse 12–24-month forecasts for smarter program planning\nForward-looking forecasts allow manufacturers to integrate material cost trends directly into sourcing, contracting, and new model budgets. Predictive analytics provide a clearer picture of upcoming price cycles and cost-driving forces, empowering teams to plan more accurately and avoid surprises. \nOptimize EV strategy\nMore sophisticated manufacturers track cell-level and pack-level battery costs, as well as gigafactory capacity expansions, to anticipate supply crunches and price shifts before they impact finished vehicle costs.  \nAt Fastmarkets, the Battery Cost Index team have built a bottom‑up cost model based entirely on fundamental cell components and cell‑specific manufacturing conditions. Combined with our own and external partner databases, this enables us to deliver detailed material and production cost estimates for NCM (all ratios) and LFP cells within the Fastmarkets Battery Cost Index.  \nThe BCI is widely used by OEM’s in negotiating large procurement contracts, costing new EV models and planning future gigafactory expansions. \nWant to learn more about what is happening at the cutting-edge of critical minerals and battery raw materials? Listen to our Fast Forward podcast series for insight, debate and news from the major players.\nCompare regional sourcing to minimize regulatory risk\nOEMs must evaluate cross-regional sourcing decisions by accounting for regulatory factors like CBAM, IRA, and USMCA content rules. \nRegion-specific cost comparisons are helping teams align with compliance requirements, while optimizing financial outcomes and reducing the risk of costly surprises. \nBuild a unified view across procurement, finance and engineering departments\nCollaboration is essential for competitive performance. By using API integrations, custom dashboards, and Excel add-ins, automotive OEMs / ICE and EV manufacturers can connect procurement, finance and engineering teams on a single source of truth.\nBuilding margin resilience in a new era of automotive volatility\nNorth American OEMs face intensifying volatility from electrification, innovation and regulation. Competitiveness now depends on managing raw material risk with speed and precision.  \nAt Fastmarkets, we already partner with major US automotive manufacturers and suppliers. \nPlease reach out for a preview of our industry-specific data and tools, including our Battery Cost Index, Gigafactory Capacity Database and Battery Recycling Outlook. \nReady to drive margin resilience? Discover how Fastmarkets can help your team move forward with confidence.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.42.0","shortVersion":"4.42.0","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2630254548","isCrawlerRequest":true}