By the end of October 2025, Europe’s automotive industry was facing an increasingly severe crisis. The manufacturers’ association ACEA raised the alarm on 29 October, warning that microchip reserves were rapidly shrinking. Within days, the first effects appeared in Germany. Volkswagen considered halting production of the Golf at its Wolfsburg plant due to a shortage of Nexperia chips, warning that it had only a few days of supply left.
Mercedes-Benz reported short-term cover but said shortages were already possible, while Stellantis set up a “war room” to manage the risk on a daily basis, taking targeted measures to preserve output. The crisis is also spreading beyond Europe: Honda has stopped production at its Celaya plant in Mexico and reduced output in the US and Canada, while Nissan said it would be covered only until early November.
The shortage of microchips is affecting not only manufacturers but also the components sector. Bosch has introduced short-time work in Salzgitter due to a lack of driver-assistance components, confirming how the just-in-time model amplifies downstream disruption. ZF has reduced shifts at its main electric drive plant in Schweinfurt and is working with customers and suppliers to stabilise supply chains and identify alternative sources. As one industry consultant told Handelsblatt, “if even Bosch is struggling to find microchips, it means Europe’s supply chain is under structural stress.”
Delivery times have lengthened by six to eight weeks in just a few days, with costs up between 5% and 20%. The logistics departments of Volkswagen, Stellantis and Bosch have reactivated emergency plans, considering temporary buffers and charter flights for critical components. The spectre of the 2020–2022 pandemic shortage has reappeared — a crisis that led to the loss of around 18 million vehicles worldwide and damages estimated at €100 billion in Europe alone, half of which were borne by Germany.
The crisis began after the Dutch government took control of chipmaker Nexperia, owned since 2019 by China’s Wingtech Technology. It did so on 30 September 2025 under the “Goods Availability Act”, citing serious management concerns and the risk of transferring intellectual property and production lines to China. In retaliation, on 4 October China banned the export of Nexperia products made in the country. Although Nexperia manufactures wafers in Europe, the inability to complete assembly in China created an immediate bottleneck.
Nexperia’s central role in automotive production explains the domino effect. The company, born from a Dutch electronics spin-off and acquired by Wingtech for about €2.6 billion, produces around 100 billion chips annually and holds roughly 40% of the automotive market. That share makes any replacement process lengthy and costly, ACEA has warned.
To understand the crisis, it is essential to look at the supply chain for automotive electronic components, which has become increasingly vulnerable over time. The semiconductors used in steering systems, sensors and electronic modules rely heavily on fragmented global flows: wafer production in Europe, assembly and testing in Asia, and worldwide distribution to suppliers. The current block in Dongguan has disrupted this synchronisation, causing weeks of delays in logistics flows and forcing companies to implement emergency strategies. Many carmakers have reactivated intermediate storage facilities, reprioritised procurement, and adjusted just-in-time planning algorithms to maintain minimal continuity.
Another cause lies in the ongoing technology war between the United States and China. Wingtech was added to the US Department of Commerce’s restricted entities list at the end of 2024, and on 30 September 2025 a new “50% rule” extended restrictions to subsidiaries at least half-owned by sanctioned entities. Against this backdrop, the Dutch government exercised its special powers over Nexperia — officially “coincidental” timing, but interpreted differently in Beijing.
The sanctions issue also intersected with internal turmoil at the company. On 7 October, an Amsterdam court suspended Zhang Xuezheng as Nexperia’s CEO following an internal petition by the firm’s own management. On 30 October, Wingtech requested his reinstatement and denied any accusations of technology misappropriation.
The industrial crisis has prompted the European Commission to open talks with the Netherlands and China. EU Trade Commissioner Maroš Šefčovič called the matter “highly important” for relations with Beijing, saying the EU is working on a joint solution with The Hague and China while preparing contingency plans for alternative supplies. Germany’s economy ministry said it is in contact with affected companies and is representing the interests of German buyers of Nexperia components currently blocked in China. A glimmer of hope could come from the agreement reached on 30 October between Donald Trump and Xi Jinping, although it is unlikely to bring immediate relief.
The crisis also raises long-term questions about Europe’s industrial strategy. According to McKinsey, in 2024 Europe met around 70% of semiconductor demand through local front-end production, but back-end capacity remains the weak link. Strengthening it would require investments of around €190 billion by 2028 — in a context where automotive chip demand in Europe is expected to triple by 2030.
