EY Study Warns European Carmakers Face Supply Risk From AI Competition for Critical Materials

European automakers face mounting supply-chain risks as competition from AI, data centers and defense industries intensifies for semiconductors, rare-earth magnets and critical metals, according to an EY study published Sept. 30, 2026, for the European Automobile Manufacturers' Association. Supply concentration scored 4.6 on a five-point scale. The most vulnerable inputs: semiconductors, silicon, tungsten, neodymium-iron-boron magnets and wiring harnesses. For six of ten inputs, refining and processing — not extraction — poses the greatest risk. China dominates rare-earth refining, magnet production and gallium processing; Taiwan and South Korea lead chipmaking. Electrification increases competition with other industries by about 15%. Carmakers represent just 17% of semiconductor end demand and 3% for gallium, which has risen from roughly $197 to $2,269 per kilogram since 2016. EY warns full self-sufficiency is unrealistic, urging faster permitting, supplier diversification and long-term demand certainty.