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Supply Chain Shortages & Supply Chain Risks in Automotive

Munich, October 2025
T

he 3 Biggest Supply Chain Risks in Automotive

Raw Materials • Rare Earths • Chips

They’ve all disrupted production before. None are secured for the future. The risk of recurrence? Higher than ever.

  • The car of the future isn’t just about batteries and software
  • It’s built on fragile supply chains, exposed to geopolitics and resource nationalism
  • Every OEM knows: the next disruption is not a question of if, but when

Supply Chain Risks: Part I – Raw Materials

From lithium for batteries to palladium for catalysts – raw materials define the limits of future mobility.

  • Volatility makes long-term planning nearly impossible for OEMs
  • What was once a procurement task is now a board-level risk

Part II – Rare Earths: The “Old” Weak Spot, Now Critical Again

“Rare earths remain the automotive Achilles’ heel – Europe thinks it has a pathway to reduce dependency, but China’s choke points are structural, not cyclical”

What the pipeline really delivers in EU – capacity:

How the headline(s) really impact the price:

  • New projects cover only a single-digit share of EU demand which is up by ~6x in 2030
  • Cost gap: New non-China projects often need NdPr ~$80–100/kg to break even vs. China ~$50–60/kg;
  • Policy reality: Without offtakes/floor prices/subsidies, projects stall when China leans on price

Part III – Chips

Racing Toward a Chip Crunch: SDVs and AI Set the Stage for

2027 Shortage

  • Automotive Demand for small node chips (3-7nm) is rising due to SDV architecture
  • In parallel, industry demand is also rising driven by AI companies and data centers
  • Chip suppliers invest in new capacity but struggle to keep up with rising demand

Shortage by 2027

Supply Chain Risks – Automotive Left Behind: AI Chips Win the Capacity Race

  • OEMs have to compete for capacity
  • AI/Datacenter chips have higher margins and per unit prices and are therefore more attractive for chip manufacturers

Authors

Christian Grimmelt

Partner

Fabian Dinescu

Project Manager

Julius Gaupp

Senior Consultant

Christopher Kaup

Consultant

Martina Seip

Assistenz

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