When geopolitics meets the assembly line
Detroit’s automakers are basically saying: when the Middle East gets messy, our input costs get messy too. The new warning is about a potential $5 billion commodities shock tied to the Iran war, which could ripple through everything from steel and aluminum to energy costs.
Why this matters for your portfolio
If you own an automaker, you’re not just betting on EVs, trucks, or fancy software dashboards. You’re also exposed to the boring stuff — the global price of raw materials. And when those prices jump, margins can get squeezed faster than a commuter in rush-hour traffic.
The knock-on effects
- Higher commodities prices can make building cars more expensive
- Energy spikes can hit logistics and manufacturing costs too
- If costs stay elevated, automakers may have to choose between lower margins and pricier cars
Big picture: wars don’t just move oil charts — they can creep into the sticker price of the car in your driveway.