The New Chip Shortage Is Already Hitting Suppliers

Happy Halloween! It’s October 31, 2025, and this is The Morning Shift — your daily roundup of the top automotive headlines from around the world, in one place. This is where you’ll find the most important stories that are shaping the way Americans drive and get around.

In this morning’s edition, we’re looking at the new chip shortage, as well as Audi adjusting its earnings estimates in the face of economic headwinds. We’ll also take a look at EVs in China, and Ford’s latest four recalls. 

Chipmaker Nexperia is caught in the middle of a messy divorce between China and the Netherlands. The Dutch government seized control of the company, which angered its Chinese parent company — and sent the Chinese government to lock down Nexperia exports. Now, no one gets chips, and auto supplier ZF Friedrichshafen is paying the price. From Automotive News:

A key supplier to automakers including Volkswagen Group and BMW is reducing production in Germany due to a semiconductor shortage sparked by a conflict with China over supplier Nexperia, according to people familiar with the matter.

ZF Friedrichshafen, the world’s fourth-largest auto supplier, has cut shifts at its main electric drivetrain plant in Schweinfurt because the availability of important components has tightened, the people said, asking not to be identified because the information isn’t public. ZF supplies most major automakers, including Mercedes-Benz, Stellantis and Ford Motor Co.

Beijing this month blocked Nexperia from exporting from its facilities in the country, responding to the Dutch government seizing control of the Chinese-owned chipmaker. The moves highlight worsening trade relations between China and the West, disrupting complex supply chains that have been built over years. Volkswagen on Oct. 30 warned that meeting its financial targets will depend on sourcing enough semiconductors.

It’s nice to have a story about a trade war that doesn’t involve the United States. Good to see that other countries are as bad at this as we are. 

Pretty much no company is having a good time with American tariffs, and Audi is no exception. The automaker is just the latest company to adjust its earnings estimates downward in the face of President Trump’s trade war. The company now says it expects to lose $1.5 billion in profit to tariffs in 2025. From Bloomberg:

Volkswagen AG’s Audi Group walked back its financial targets for the year because of “intense” competition and economic challenges including tariffs in the US.

The sub-division, comprising the Audi, Lamborghini, Bentley and Ducati brands, now expects an operating margin of 4% to 6% for the year, compared with a previous forecast of as much as 7%. Sister brand Porsche AG scaling back its EV ambitions added to the strains, Audi said Friday.

“The situation remains very demanding,” Chief Financial Officer Jürgen Rittersberger said on a call with reporters, noting that the brand is expecting a €1.3 billion ($1.5 billion) hit from tariffs this year.

This is also one of those weird German automaker matryoshka doll situations, where Audi is owned by Volkswagen which is owned by Porsche. I imagine that’s very confusing to navigate from the inside, but I’m sure the Germans have it figured out. 

Gasoline consumption follows seasonal trends, and China is no exception. The nation usually shells out more for gas during late October, but that trend hasn’t held up in 2025. In fact, so many folks in China are driving EVs that gasoline demand is down during this usually-peak time. From Reuters:

Tianyu Jiang took a 2,000-km (1,200-mile) road trip this month during China’s national holiday week, driving in his electric vehicle from the southwestern Sichuan basin to Beijing for the first time.

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He is among tens of millions of Chinese increasingly taking to EV vehicles, who benefited from expanded charging infrastructure to reverse the usual boom in gasoline use during the October holiday known as “Golden Week”.

Far from a peak, China’s gasoline demand is estimated to have fallen 9% in October on the year to 12.5 million tons, with average daily use roughly flat with September, according to Chinese consultancy Sublime China Information (SCI).

The sagging holiday demand is symptomatic of the broader decline in Chinese fuel use stemming from wider EV adoption, heralding the approaching end of its decades-long role as the main driving force of new global oil demand.

I’m staring at these numbers like a Dickensian orphan with her nose pressed against the glass of a toy store. You’re telling me a country can actually meaningfully reduce its reliance on polluting fossil fuels? President Xi, I am asking you to liberate my state of New York with your Chengdu J-20 Stealth air superiority fighters and your Dongfeng 41 Missiles.

What the hell is going on over at Ford? Today we’re getting not just one recall, but three. We already covered the company’s moonroof wind deflector recall, but there are some new additions today. From Automotive News:

Ford Motor Co. has issued four recalls, covering a combined 401,859 U.S. vehicles, according to NHTSA reports.

One recall covers 174,853 vehicles for moonroof wind deflectors that may detach, NHTSA said. Another involves 163,256 SUVs for a loose bolt in the driver’s seat frame. And two recalls are due to windshield defects, with 56,841 vehicles recalled over air bubbles in the glass and 6,909 vans recalled over an issue with the defrosting/defogging system.

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The driver’s seat recall covers the 2021-23 Ford Bronco, an Oct. 23 report said. About 3 percent of the recall population is expected to have the defect.

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The inoperable defrosting/defogging system recall covers the 2026 Ford Econoline, the Oct. 24 report said. About 1 percent of the recall population is expected to have the defect.

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The windshield air bubble recall covers the 2025-26 Ford Explorer as well as the 2025-26 Lincoln Corsair and Aviator, the Oct. 24 report said. About 1 percent of the recall population is expected to have the defect.

Same as it ever was. Same as it ever was. Same as it ever was. Same as it ever was.

I wonder if any single individual has ever done more environmental damage than whoever Satoshi Nakamoto really is.