The platinum-palladium substitution trend is accelerating as automakers exploit the persistent price discount of platinum versus palladium. With palladium trading above $2,900/oz and platinum at $1,712, the ~$1,200/oz spread incentivizes substitution in gasoline catalyst formulations.
Johnson Matthey reports that platinum-for-palladium substitution in gasoline catalyst systems reached approximately 35% in 2025, up from 25% in 2023. Automakers are increasingly comfortable with the substitution as engineering validation accumulates.
European diesel vehicle production has stabilized at roughly 15% of the market, providing a stable floor for platinum demand in diesel oxidation catalysts and diesel particulate filters. Chinese heavy-duty truck production remains strong, supporting diesel PGM consumption.
The substitution trend has a dual effect: it increases platinum demand while reducing palladium demand. This is one reason why platinum is outperforming palladium in 2026.
The Pt-Pd spread is likely to tighten over time as substitution runs its course, but for now the trade favors buying platinum over palladium for new catalyst designs. Automotive buyers should validate substitution engineering targets for 2027-28 models.