EU automotive industry faces supply chain risks from material concentration

A study commissioned by the European Automobile Manufacturers' Association (ACEA) and conducted by EY identifies supply chain concentration as the primary risk to the European Union's automotive industry. The analysis evaluated ten critical materials and components, finding that the high concentration of suppliers poses a significant threat to production stability.

Five specific inputs were identified as particularly vulnerable: semiconductors, silicon, tungsten, neodymium-iron-boron magnets for electric motors, and wiring harnesses. While raw material extraction is a concern, the study highlights that for six of the ten materials, the greatest risk lies in the refining and processing stages rather than mining.

China currently dominates the processing of rare earths, magnet production, and the refining of gallium and germanium. Meanwhile, Taiwan and South Korea remain central hubs for semiconductor manufacturing. Industry experts note that Europe's challenge extends beyond accessing raw materials to overcoming shortages in processing capacity, qualified suppliers, and specialized technical expertise, noting that these capabilities cannot be established quickly.