EY Report Identified Supply Risks for European Automakers
A new industry analysis highlighted critical vulnerabilities in the sourcing of semiconductors and rare-earth materials.
Updated on Sept. 30, 2026 in Auto Parts
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Consultancy EY has issued a report revealing that European automakers face a high risk of supply chain disruption due to a heavy reliance on concentrated global markets. The analysis assigned a supply concentration score of 4.6 out of 5 for key materials including semiconductors, silicon, and tungsten.
Why it matters
The transition to electric vehicles has surged demand for power electronics, increasing competition for raw materials by 15 percent. Because Europe lacks local processing capacity and specialized expertise, the industry remains vulnerable to export curbs and regional crises like those seen in 2025.
Automakers account for 17% of end demand for semiconductors and 3% of global gallium demand. Prices for gallium have climbed from $197 to $2,269 per kilogram since 2016, an 11-fold increase driven by tightening market availability.
The players
EY
This is a global professional services firm that provides consulting, tax, and advisory services to major industries.
European Automobile Manufacturers' Association
This is an industry trade group that represents the interests of major automotive manufacturers operating in Europe.
Nexperia
This is a global semiconductor manufacturer that specializes in discrete components, power MOS devices, and logic ICs.
Volkswagen
This is a major German automotive manufacturer that is currently expanding its presence in the autonomous vehicle market.
The details
The report identified China as the dominant source for refined rare-earth materials and magnet production, while Taiwan and South Korea serve as critical hubs for chip manufacturing. Dependence on these regions has previously resulted in production halts, including the supply crisis experienced by Nexperia in October 2025.
Timeline
2016: Gallium price baseline established.
2021-2022: Global chip shortage occurred.
October 2025: Nexperia supply crisis occurred.
September 2026: EY report published.
Late 2026: Volkswagen robotaxi deployment in Los Angeles.
Roadmap
The report highlights that structural supply chain vulnerabilities continue to plague the auto sector following the 2021-2022 global chip shortage, as competition for materials intensifies. As automakers pivot toward electrified and autonomous models, the industry's reliance on a few concentrated geographic hubs presents a permanent strategic challenge for European market stability.
Potential supply chain bottlenecks may influence future vehicle availability and retail pricing as manufacturers navigate increased competition for raw materials. Buyers should anticipate longer lead times for specific high-tech components as the sector shifts to meet higher electronic content demands.
The takeaway
The automotive industry is facing a tightening supply environment that mandates a shift toward more resilient, localized sourcing strategies. Investors and consumers should monitor how quickly manufacturers can secure alternative material pathways to avoid production slowdowns.
What happens next
Volkswagen is scheduled to begin the deployment of its autonomous electric microvans in Los Angeles in late 2026.
Further reading
For more on industry infrastructure, visit our Auto Parts section.
Source note: This article includes information reported by Euronews English.
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