Automotive News Europe — 2025-11-12
Automotive Industry
The Nexperia supply crunch is thawing after China partially eased a ban on exports of the company’s chips that are vital components in cars — but the potential resolution of the dispute masks deeper supply chain vulnerabilities.
Automakers can expect similar supply chain crises to reoccur as geopolitical tensions among China, Europe and the U.S. persist, industry watchers say.
Pedro Pacheco, head of research at Gartner, said global automakers’ growing dependency on China for their supplies of raw materials and processed lithium is a danger to the supply chain that could hurt a lot more today than a few years’ ago.
Automakers can always find alternative sources of raw materials outside China. The real danger is a growing reliance on China’s advanced EV technology, hardware and software, Pacheco said.
The number of Western and Japanese automakers incorporating vehicle electronic architecture and software from Chinese automakers is growing rapidly, Pacheco said.
“If you look at the world’s largest automakers most of them already do it. Mazda, for example, sells the Mazda EZ-6 in Europe with vehicle architecture from China’s Changan Automobile and this is starting to happen increasingly.”
Buying technology from a Chinese automaker may seem like a quick and easy solution. But in the process, you become more dependent on what essentially remains a competitor, Pacheco said. “As a non-Chinese legacy automaker, you start digging a hole that becomes difficult to jump out of.”
As China races ahead with its introduction of increasingly sophisticated systems and components, it is becoming difficult for a Western automaker to develop an electric vehicle without depending on China, Pacheco said.
“If Western companies cannot rely on Chinese automakers anymore, then they will have an issue,” he said.
Global automakers need to start making necessary internal changes by prioritizing their own technology, Pacheco said.
Building agility and resilience is key for automakers
Industry watchers say speed and flexibility are also key, and some automakers have already started to take steps to improve their supply chain agility.
“Carmakers used to operate on a 20 years’ plan,” Pacheco said. “Today, there are so many disruptions and so many technological changes that a traditional carmaker cannot operate the way it did 10 years ago. For more of these organizations instead it is about building agility.”
Others are stuck in the premise of too much cost cutting instead, he added.
Accenture analyst Jürgen Reers said that most supply chains remain “overly manual and lack autonomy, limiting their ability to pivot quickly when disruptions occur.” But measures to strengthen resilience inevitably come with additional costs.
“This is tough in an environment where margins are shrinking and price competition is intensifying,” said Reers, who is Accenture’s senior managing director for global automotive and mobility.
When the next disruption hits, the companies with “resilient, diversified and autonomous sourcing networks” will be able to adapt faster and minimize the negative impact, he said.
“As the industry faces pressures from EV transformation, supply constraints, and shifting trade patterns, the ability to see, decide, and act faster will make a difference. Resilience is a competitive differentiator, not just a risk mitigation strategy,” Reers said.
Germany’s VDA auto association said automakers and their suppliers adapted their processes in recent years and made themselves “more resilient, diversifying their suppliers and delivery routes.”
However, companies keep limited inventories, and if a hub like Nexperia fails, other manufacturers cannot scale up production to such levels at such short notice, a VDA spokesperson said.
The threat of production stoppages at automakers such as Volkswagen and their suppliers, including Robert Bosch and ZF, has receded after supplies of Nexperia chips resumed.
Nexperia, which is based in the Netherlands but Chinese-owned, makes billions of chips for cars and other electronics. Beijing imposed export controls on the company’s China-made products after the Dutch government took control of the supplier on Sept. 30, citing concerns about technology transfers.