Feast, Then Famine

March 2, 2026

Michael Robinet

Over the past few Supplier Eye columns, we have explored the impact of weakened U.S. emissions legislation and the loss of global scale economies. In isolation, suppliers could devise a gameplan to accommodate either of these shifts though together, a completely revised approach is necessary. The combination demands that suppliers re-evaluate all facets of market strategies.

Given this increased U.S. isolation, is there a possibility that the next five years could be the golden age of our industry? A period where the U.S. takes a pause from the speed and technical requirements of the rest of the world’s markets to focus on our internal market? Leave global considerations on the doorstep? It is not only a possibility but a likely reality into the next decade.

Some context is in order. We have outlined in past writings about the flattening of U.S. emissions legislation and the fairly swift decoupling of the U.S. fleet from the rest of the world as most countries continue to demand efficiency improvements in their vehicles. Without this requirement for the U.S., most OEMs are: extending product cycles of current ICE vehicles; not prioritizing lightweighting or fuel-saving technologies over the next cycle; angling to reduce cost through de-contenting or ‘re-trimming’ vehicles to improve affordability and keeping a lid on vehicle inventory expansion; and, pushing the timing of new and heavily-revised platforms down the road to better utilize existing capital. In fact, the S&P Global Mobility forecasts that North American Light Vehicle production volumes will rise to well over 16 million units per annum by 2030. Not a bad market.

While this paints a rosy near-term picture, be careful what you wish for. At issue is that while the rest of the world may be slowing somewhat from a technological perspective, they continue to advance. In the case of the Mainland Chinese OEMs, they will continue to build scale and technological advantages in electrified powertrains, executing vehicles for the domestic and export markets. We, on the other hand are extending vehicles cycles for many current offerings, further building a divide in capability. Additionally, it will be more difficult to export our vehicles from this market as legislative requirements abroad continue to tighten versus ours.

Why w orry? Many note that we should live for today and not be concerned with other markets. There are a couple reasons why this should be a consideration. Firstly, North America (if you include Mexico and Canada) is still smaller than both Europe and Mainland China from an annual volume perspective. Newsflash, we have not been the largest vehicle market for several years. Secondly, OEMs mainly focused on the U.S. will find it more difficult to compete in other markets using existing platforms. They will need to use advanced regional structures which will limit scale economies with vehicles back home and negatively impact competitiveness. This is already occurring in Mainland China with a number of Western OEMs. Finally, when and if China-based OEMs (outside of Geely, which is already here) are able to set up shop in the U.S., they will have an advantage if the legislative winds shift and efficiency improvements are required in the U.S. once again.

While we may be enjoying a ‘Golden Age’ over the next vehicle cycle, one should be concerned over our ability to compete in other markets on the other side.