VW Executive Warns Car Industry as China-Netherlands Chip Dispute Threatens Production

A key executive at Volkswagen AG has urged a swift diplomatic solution to a trade stand-off between China and the Netherlands involving chipmaker Nexperia BV.

The dispute stemmed from the Dutch government seizing control of Nexperia on national-security grounds. In response, China banned exports of the company’s chips, which carmakers like Volkswagen rely on.

Olaf Lies, a supervisory board member at Volkswagen and Premier of Lower Saxony, said the automotive industry cannot handle this crisis alone. He warned that Europe may be pulled into a larger US-China trade battle.

He added that Europe “needs a little less dependency” on foreign-controlled supply chains and should boost its own semiconductor production. The commentary reflects growing fears that the chip dispute could trigger factory stoppages and supply disruptions.

Europe’s auto-making heartland watches on: chips made by Nexperia are used in high volumes in vehicle systems, though they are not the most advanced semiconductors. Still, their absence could disrupt just-in-time production lines already under strain.

In short: As diplomatic tensions escalate, German carmakers and the EU may face real production risks unless a solution is found quickly.