EU Carmakers Days Away from Production Halt Amid China Chip Export Ban

Europe's automotive industry faces an imminent crisis as carmakers warn they are only days away from halting production due to a critical shortage of microchips. This shortage stems from a diplomatic conflict triggered by the Dutch government's takeover of Nexperia, a chip supplier owned by Chinese capital, which led China to ban exports of these essential components to Europe. Major manufacturers, including Volkswagen, BMW, Stellantis, and Renault, are rapidly depleting their reserve stocks, with assembly line stoppages expected soon. The chip scarcity highlights Europe's dependence on foreign-controlled supply chains and coincides with China's restrictions on rare earth exports, further stressing the industry. Efforts for a diplomatic resolution between China and the Netherlands are ongoing but have yet to resolve the supply disruption. Industry leaders urge intensified diplomatic efforts to prevent irreversible damage to Europe's automotive sector and broader industrial vulnerabilities.