Global Auto Supply Chain Stumbles Forward After China Eases Chip Export Stranglehold
Carmakers are hitting speed bumps they didn’t see coming, yet somehow they’re still on the road. Beijing just lifted export restrictions on Nexperia chips after a month-long standoff that threatened global auto production. The crisis began when the Dutch government seized Nexperia over its Chinese ownership, prompting China to block chip exports. The standoff has ended, but Ford’sF CEO Jim Farley says 2025 still feels like “a lot of cost and a lot of chaos.”
- The export freeze hit hard, since 80% of Nexperia’s finished chips go through Chinese processing facilities — creating supply chain disruptions for automakers worldwide.
- VolkswagenVWAGY, HondaHMC, and Ford had sounded alarms about disruptions, pressuring governments across Europe, China, and the US to resolve the impasse.
Rushing back: While Barclays upgraded the US auto sector to neutral from negative — saying it’s “held in better than anticipated” six months into tariffs — deep cracks are emerging. Subprime auto loan delinquencies hit 6.43% in August, tying January’s record, even as wealthier buyers keep spending thanks to rising home equity and strong credit access. Despite its resilience, the sector still faces fragile suppliers, uneven consumer demand, and growing uncertainty over rare earth sourcing.