Interattivo
As volatility has become the norm for the automotive industry, it has upended traditional profit margin dynamics. For two decades leading up to 2019, automotive suppliers’ EBIT margins were on average 1 to 2 percentage points higher than those of original equipment manufacturers (OEMs). Then came massive supply chain disruptions with the Covid-19 pandemic and global chip shortage, plus higher raw material and energy prices, and now rising borrowing costs and wage bills due to inflation. Automotive OEMs were able to ride out the supply shortage by focusing production on the highest-margin models and raising prices, but suppliers had no such strategic options.
We’re tracking the EBIT margins of the top 15 OEMs and top 100 suppliers worldwide, and each quarter, we publish the latest trends in this dashboard.
Here are some of the key takeaways through the fourth quarter of 2025:
- OEM margins remained under severe pressure in the fourth quarter of 2025, reaching 3.6%—down more than 60% from their 2021 peak and well below pre-Covid levels. This marks the sixth consecutive quarter in which supplier margins outperformed those of OEMs, extending the reversal that began in 2024. Factoring in large electric vehicle (EV)–related write-offs and costs from canceled programs by US-exposed OEMs—ranging from roughly $5 billion to more than $20 billion each—pushes the adjusted quarterly margin down to –2.3%. This brings the full-year 2025 OEM average down to 2.7%, underscoring the scale of the structural reset underway.
- OEM margins are being squeezed by softening demand, intensifying price pressure, and persistently high financing and input costs. Uncertainty around the pace of EV adoption continues to weigh on profitability as OEMs bear the cost of running parallel portfolios of both EV and internal combustion engine products. Many are expanding performance and cost-reduction programs to protect profitability—initiatives that are increasingly felt by suppliers.
- Supplier margins remained broadly stable in the fourth quarter of 2025, averaging 6.9%—roughly in line with the third quarter and continuing the overall steady trend since 2022. Overall, suppliers have shown considerably more resilience than OEMs, whose margins continue to face severe pressure.
- When we first warned of a looming “perfect storm” of pressures on automotive margins in 2022, few in the industry were prepared for what was coming. That hurricane of cost, demand, and policy pressures is now in full force. Both OEMs and suppliers have no time to lose to strengthen the resilience of their business models by accelerating structural cost measures and maintaining pricing discipline. Looking ahead, escalating trade tariffs and ongoing geopolitical uncertainty could add another layer of strain, particularly for globally exposed supply chains.