Why Palladium Is Heading for a Rough 2025

Remember when palladium hit $3,002/oz back in February 2022? Those days are long gone. The metal has been in a downtrend ever since, and here’s the kicker—2025 is shaping up to be even tougher.

The Auto Sector Problem

Palladium’s fate is tied to one thing: catalytic converters in cars. Roughly 80% of demand comes from here. Sounds solid until you realize the auto industry itself is in flux.

Yes, overall car sales are projected to grow 1.7% to 89.6 million units in 2025. But here’s what matters: electric vehicles are eating into demand. EV market share is expected to hit 16.7% in 2025, up from 13.2% in 2024. The problem? EVs don’t need palladium at all. And unlike the explosive EV growth we saw before, the adoption curve is flattening due to charging infrastructure concerns, range anxiety, and market saturation.

Trump’s Tariff Wildcard

There’s another wrench in the works. Trump’s proposed 25% tariffs on Canada and Mexico would hit auto manufacturing hard—vehicles and parts would face a 25% cost bump every time they cross the US border. Meanwhile, rolling back EV subsidies (which could increase EV prices by $7,500) paradoxically pressures demand for all vehicles.

Translation: weaker auto sales = less palladium needed.

Supply Is Flooding In

While demand weakens, supply does the opposite. The World Platinum Investment Council forecasts the palladium market flipping into surplus territory starting 2025, with oversupply hitting 897,000 ounces. That’s thanks to a 1.2 million ounce bump in recycled material plus Russian and South African mines ramping production back to historical levels.

The Price Call

Experts aren’t bullish. CPM Group’s Jeffrey Christian expects palladium to stay rangebound between $900-$1,000 in 2025, with a downward bias. Heraeus Precious Metals is even more bearish, predicting a $800-$1,200 range. The consensus: 2025 won’t be kind to palladium bulls.

After 2024’s sideways action in the $900-$1,100 range, next year could test the lower end of that band.