Risk management
Building the automotive supply chain of 2026: What are the biggest risks to the supply chain in the year ahead?
Tariffs, geopolitical tension, EV demand, extreme weather conditions – these are just some of the risks that companies in the automotive sector will have to navigate in their supply chains in 2026.
During Automotive Logistics' 'Building the automotive supply chain of 2026' livestream, chief content officer Christopher Ludwig and deputy editor Megan Kelly outlined some of the most significant risks facing automotive supply chains in 2026.
"There's been more and more uncertainty [in recent years] and it keeps ramping up." said Kelly. "We used to have black swan events every few years, and now it seems there are multiple per year."
Kelly highlighted tariff uncertainty, supplier stress and market fragmentation as key areas of concern – pointing towards the suspension of operations at Standard Freight Forwarding as an example of the impact of today's market environment on the logistics industry.
She also touched on a number of other sources of risk, such as: raw material dependency – an issue that the ongoing Nexperia crisis has highlighted in the past year; shifting EV policies like the EU scrapping its 2035 ICE ban; natural disasters like the devastating winter storm that recently hit parts of the US; and compliance and regulation issues, for example complying with the EU's Packaging and Packaging Waste Regulation (PPWR).
Reflecting on his statement at ALSC Global in September 2025 that there's no going back to the industry we once knew, Ludwig acknowledged how much has changed since then and the additional disruption the industry has seen in just a matter of months.
"If we think about risks right now in the automotive supply chain in 2026, we certainly have to break them down into the market level, and then certainly an operational and logistical level – which may be hitting people day by day," Ludwig said.
He noted that some disruptions, whether that be adverse weather conditions or a fire at a plant, are part and parcel of supply chain operations, but the faster pace at which disruption has been coming and the combination of multiple areas of uncertainty is what has profoundly changed the automotive supply chain landscape in recent years.
In terms of geopolitics, Ludwig identified US president Donald Trump's use of trade policy instruments as an ongoing source of disruption, with 2026 already seeing the US impose additional tariffs on South Korea, in addition to Trump threatening Canada with tariffs over trade with China and threatening eight European countries with tariffs over the Greenland ownership dispute – a threat he later backed down on.
However, Ludwig acknowledged that the US is not the only source of tariff uncertainty. Mexico, for example, introduced new tariffs for countries it does not have a Free Trade Agreement with at the start of the year. Aside from tariffs, he noted that the impact of war is something firms must unfortunately be prepared for as the Russia-Ukraine conflict continues, tensions rise in Iran and uncertainty persists around China-Taiwan relations.
From a financial and strategic perspective, shifts in attitude towards electric vehicles is a huge area of uncertainty. Consumer EV adoption has been slower than expected and some OEMs and policymakers have reassessed their EV commitments in response.
The Trump administration revoked the Biden administration’s 2030 EV sales target and paused funding for EV adoption incentives from the Inflation Reduction Act (IRA) in early 2025, before the US Senate passed the ‘Big Beautiful Bill’, in September which saw the end of consumer EV tax credits. And in Europe, the EU replaced its 2035 ban on the sale of ICE vehicles with a 90% tailpipe emissions reduction target after pressure from Germany, Italy and Hungary to relax the law.
GM took a $6 billion earnings hit scaling back EV production while Ford scrapped production of the F-150 Lightning electric truck to focus on expanding its powertrain mix, claiming "the business case has eroded".
On a more operational level, 2025 showed just how vulnerable supply chains can be, with the JLR cyberattack severely impacting not just the OEM but also its network of suppliers, and the fire at Novelis' hot mill in Oswego, New York resulting in an expected $1 billion headwind for Ford. Investing time and money into areas like cybersecurity and supply chain mapping could be crucial as OEMs look to learn from the year just gone to boost resilience for the year ahead.
Watch the full livestream on demand here and make sure to register now for Automotive Logistics' next livestream all about digitalisation, taking place online on March 5, 2026.
