KEY POINTS
- UK policy flexibility could extend demand for palladium as hybrid vehicles remain popular.
- Platinum has broken above $1,800/oz, while palladium’s recent rally has stalled.
- Gold remains strong above $4,600/oz amid renewed central-bank interest in the metal.
Palladium demand from the automotive industry could receive some support if the UK relaxes the pace of its transition to battery electric vehicles (BEVs), according to precious metals specialist Heraeus.
The UK is reviewing its zero-emission vehicle mandate after BEV sales fell below the government’s target for 2026. Any decision to give car manufacturers more flexibility could encourage a longer transition towards hybrid vehicles, which still rely on catalytic converters containing palladium.
Heraeus said this could help extend automotive demand for palladium, although it would not reverse the metal’s longer-term decline as the global vehicle market moves towards zero-emission technologies.
Hybrid vehicles are already playing a major role in the transition away from conventional petrol and diesel cars.
In the UK, hybrids accounted for 37.7% of new vehicle registrations in the first six months of 2026, while plug-in hybrids represented another 13%. Across the European Union, hybrid vehicles accounted for 37.3% of registrations during the same period.
BEVs, meanwhile, made up about 25% of new UK car registrations in the first half of the year, compared with the 33% zero-emission target set for manufacturers in 2026.
The UK still intends to phase out the sale of new conventional petrol and diesel cars by 2030 and require all new cars and vans to be emission-free by 2035.
Palladium is widely used in automotive catalytic converters, which help reduce harmful emissions from vehicle engines.
A slower shift towards fully electric vehicles would therefore allow more petrol-powered and hybrid vehicles to remain on the road for longer, supporting demand for palladium-containing autocatalysts.
However, Heraeus stressed that this would mainly slow the decline in automotive palladium demand rather than create a lasting reversal, because the broader direction of government policy and the automotive industry remains towards zero-emission vehicles.
