The auto industry just can’t seem to get a break. U.S. assembly plants are weeks away from shutdowns due to new chip shortage.

Germany’s VDA, the lobbying group for the auto industry, warns that suppliers and automakers in Europe are also only days away from having to shut down production because of a another chip shortage.

And the shortage could spread beyond Europe to the U.S. within weeks.

Here’s the issue: a Dutch chip maker called Nexperia got bought out by a Chinese company called Wingtech. The Trump Administration then warned the Dutch that the Chinese were planning to move technology and production out of the Netherlands to China, so the Dutch government took the company over.

China retaliated by prohibiting exports of Nexperia components that are made in China, and that’s what triggered the chip shortage.

Automakers are scrambling to find other sources, but once again the industry is on the brink of another chip shortage.

This is how a single government move in Europe is sending shockwaves through the global auto industry. In late September 2025, the Dutch government seized control of Nexperia, a Chinese-owned chipmaker supplying essential components to carmakers worldwide.

Within days, China retaliated by restricting exports from Nexperia’s Chinese operations, triggering warnings from automakers that production lines in Europe — and potentially the U.S. — could face serious disruptions. This is not hypothetical. Cars on dealer lots and assembly schedules from Detroit to Wolfsburg could be directly affected if chip deliveries do not stabilize.

Nexperia, the chips, and the Dutch intervention

Nexperia may not produce the most advanced semiconductors, but it manufactures high-volume automotive chips that control electronic systems in modern vehicles. Without them, automakers cannot assemble cars efficiently. Automakers used what is called, “legacy chips” and most have not changed even after the last chip shortage.

On September 30, the Dutch government invoked emergency powers to take control of Nexperia, citing concerns about technology transfer to the company’s Chinese parent, Wingtech. This action followed months of U.S. pressure, including adding Wingtech to the U.S. entity list and extending export control restrictions to subsidiaries owned at least 50% by China.

Dutch officials described the intervention as a defensive step to protect European technological assets and maintain supply-chain security. While day-to-day operations were to continue, strategic decisions that now fell under government oversight, This is a significant escalation for the European tech industry.

China’s response and the industry warning

On October 4, China’s Ministry of Commerce issued export controls prohibiting Nexperia China and its subcontractors from exporting certain finished components and sub-assemblies. Automakers immediately expressed concern.

The European Automobile Manufacturers’ Association (ACEA) warned that production could be “significantly disrupted.” In the U.S., the Alliance for Automotive Innovation, representing nearly all major automakers including General Motors, Ford, Toyota, Volkswagen, and Hyundai, urged a quick resolution.

“If the shipment of automotive chips doesn’t resume — quickly — it’s going to disrupt auto production in the U.S. and many other countries and have a spillover effect in other industries,” said CEO John Bozzella. Some U.S. auto plants could be affected as soon as next month. That means 2026 models being shipped in November.

Why these chips matter

Modern vehicles rely heavily on electronics. Even models without luxury infotainment systems use Nexperia chips for electronic control units, powertrain management, safety systems, and more.

The disruption illustrates the fragility of the global supply chain. Automakers cannot simply switch suppliers overnight; qualifying new chips and redesigning vehicle modules takes months. Even a small interruption can cascade, causing production delays, increased costs, or halted assembly lines.

Volkswagen and BMW reported that European production has not yet been impacted but said they were actively evaluating supply risks. In the U.S., exposure grows daily as plants rely on components sourced through European operations or shared supplier networks. Japan and other countries are already preparing for the negative impact.

Signs of a potential resolution

Sources indicate that Nexperia’s China unit has resumed chip sales to domestic distributors. While this relieves internal pressures, international supply chains remain strained. Automakers are closely monitoring whether shipments to Europe and the U.S. will normalize. It’s hard to trust what China might do and the impact of the tariffs.

Even temporary shortages can affect vehicle availability, pricing, and feature sets. A delay in a single electronic control unit, for instance, can prevent entire vehicle lines from rolling off the assembly line.

Impact on automakers and consumers

The disruption could lead to short-term production slowdowns, with car plants in Europe, Japan, Korea and potentially the U.S. reducing shifts, delaying vehicle launches, or postponing deliveries.

BMW and Volkswagen in Germany are actively evaluating supply risks, while Ford, General Motors, Toyota, and Hyundai in the U.S. could see plants affected within weeks if chip shipments are delayed.

The need to find alternative suppliers, expedite shipping, or re-engineer components will increase costs, potentially raising vehicle prices for consumers. Automakers are also likely to accelerate supply-chain restructuring, diversifying suppliers, resourcing production domestically, or redesigning vehicles to rely less on single-source components.

If chip availability remains constrained, vehicles may arrive with fewer options or higher prices, impacting both buyers and dealers. This will not help a hurting industry.

Lessons for the auto industry

The Nexperia dispute highlights a growing reality: automakers are navigating a geopolitical minefield. Governments increasingly treat technology and component supply as strategic assets, and decisions made halfway across the world can ripple through production lines almost instantly. It seems like the last chip shortage didn’t teach too many lessons.

Automakers must now consider geopolitical risk in procurement decisions, diversify suppliers, and maintain contingency stock. For consumers, vehicle availability, pricing, and features can be affected by forces far beyond local dealerships. Just like the last chip shortage, dealers raised priced to offset lack of supply and high demand.

The Nexperia situation demonstrates how global automotive production is intertwined with geopolitics. While cars may seem insulated from politics, a single regulatory move in the Netherlands can impact production schedules, inventory, and pricing across multiple continents.

For now, the situation is fluid. Automakers are monitoring supply chains, governments are negotiating behind the scenes, and consumers may see ripple effects in pricing and vehicle availability. We will be monitoring the movements and keeping you posted.

In a world where electronics are as essential to cars as engines, supply-chain resilience is no longer optional — it’s critical. The Nexperia dispute is a warning sign, and for the auto industry, the stakes could not be higher.

Video link: https://youtu.be/lGAX9aKSjCA

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Lauren Fix is an automotive expert and journalist covering industry trends, policy changes, and their impact on drivers nationwide. Follow her on X @LaurenFix for the latest car news and insights.