Plastics Advice 2026
Automotive
Tariffs, technology shifts and softening demand are forcing automakers to rethink everything from where they build to what they build. 2026 is the year strategy matters more than scale.
What global trends will most significantly shape the automotive market in 2026?
Tariffs will be one of the biggest forces shaping the automotive market in 2026. The industry is still adjusting to the tariff implementations introduced this past year, and companies are reconsidering where they source both materials and full programs. Many original equipment manufacturers (OEMs) are questioning whether it still makes sense to purchase certain resins and parts from Asia, given that tariff impacts are raising total costs. These questions will only intensify throughout 2026.
That uncertainty is also shaping conversations around nearshoring between Mexico and the United States. But moving a program is a massive financial commitment, and OEMs are cautious about making multi-billion-dollar sourcing decisions based on shifting global market conditions. The hesitation is understandable, but the long-term direction still leans toward more regionalized footprints.
That broader caution is also tied to overall market conditions. The 2026 market is expected to be soft, which adds another layer of conservatism to major sourcing decisions. The cost of launching a new model has risen significantly and now requires multiple propulsion variants — internal combustion engines (ICE), hybrid and full electric vehicles (EVs). In response, OEMs are extending platform lifecycles and focusing more on mid-cycle refreshes rather than full redesigns. This technical and financial complexity is influencing nearly every decision OEMs make today.
What promising developments will most impact automotive plastics in 2026?
Technology remains one of the biggest catalysts for change inside the vehicle. The continued evolution of self-driving systems and advanced driver-assistance features is driving innovation under the hood. Tesla has set aggressive expectations for hands-free capability, and every OEM is working toward its own version of that feature.
Automakers have similarly ambitious targets for incorporating recycled content. European OEMs, in particular, are requesting recycled materials in nearly every quote. Automotive applications are complex, and recycled materials aren’t always straightforward substitutes. The challenge is balancing cost, performance and safety. Even so, demand is only increasing, and it will continue shaping material development across the supply chain.
Design trends are another factor driving material development. Interest in lighting and illumination keeps growing, whether it’s backlit surfaces, light-through-material features or seamless touch controls that replace traditional buttons. Illuminated grilles and signature lighting are becoming central to brand identity. All of these elements rely heavily on specialty plastics engineered for optimal performance, durability and aesthetics.
How are shifts in global trade dynamics affecting sourcing decisions for automotive plastics?
Trade pressures are influencing nearly every sourcing decision. Materials that were once cost-competitive coming out of Asia no longer hold the same advantage once tariffs are taken into consideration. That shift is prompting companies to take a closer look at what can be sourced in the U.S. or brought into Mexico.
As a result, nearshoring remains one of the most promising long-term trends, even if it’s moving more slowly than some expected. Companies are evaluating how to bring programs closer to home; the question is increasingly where those programs should land. Mexico remains a major hub, and within the U.S., the Southeast is emerging as an automotive center thanks to labor advantages and significant OEM investment.
The push to de-risk supply chains is also driving these decisions. The industry learned a difficult lesson during the COVID-19 pandemic, when moving finished goods became a major bottleneck. Increasing North American capabilities makes companies less vulnerable to global disruptions and shifting trade policy.
What advice would you give plastics manufacturers to drive success in 2026?
Be extremely disciplined in how you run your business and lean into nearshoring opportunities when they arise.
The automotive market is facing financial pressure across the supply base, from OEMs to Tier 1 suppliers. Many organizations are downsizing, and cash is tight. Keeping operations right-sized and efficient will be crucial to avoid overextending in what could be another soft year.
OEMs are looking for ways to reduce cost without sacrificing quality, and plastics will continue to play a key role in making that possible. Explore material flexibility as a cost-saving lever. Some applications that have historically relied on higher-cost materials, may be good candidates for more economical alternatives.
Nearshoring remains another bright spot. Bringing programs and production back to North America reduces supply chain risk and strengthens the domestic automotive landscape. That’s a long-term positive for the entire North American automotive market.
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