Oct. 21, 2025 | Nexperia chip crisis explained; GM profits plunge on EV production charges

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Today on the show, GM's profits plunge, but the company's raising its forecast for 2025. GM's also pulling the plug on its bright-drop electric fans, and Canada cuts off its EV incentive program. Plus, automotive news Europe's Peter Siegel joins the show to break down everything you need to know about the next-period chip prices and what comes next.

I don't think anyone really wants to see factories idle, even the Chinese government. There's probably a way out of this.

Let's run through all the news you need to know to keep up in the auto industry. General Motors is feeling confident about the rest of the year, even after a rough quarter. The auto maker raised its full-year earnings forecast for 2025.

It said import tariffs won't sting as much as expected. GM now expects adjusted earnings between $12 billion and $13 billion.

That's up from its earlier forecast, even as it trimmed the top end of its net income guidance to $8.3 billion.

But third quarter profit plunged 57% to $1.3 billion. That's largely because of a one-time charge from scaling back its EV plans.

Meanwhile, GM plans to end production of its bright-drop electric fans in Canada as the market for them has struggled to gain traction.

CEO Mary Barra made the announcement on the company's third quarter earnings call this morning.

This is not a decision we made lightly because of the impact on our employees.

However, the commercial electric fan market has been developing much slower than expected

and changes to the regulatory framework and fleet incentives have made the business even more challenging.

Barra says GM is assessing its Kami assembly plan in Inger Solar Ontario for future opportunities.

And after months in limbo, Canada's electric vehicle incentives program is officially over.

The incentives for zero emission vehicles program or IZEV offered customers up to $5,000 off battery electric and plug-in hybrid vehicles.

The department responsible, Transport Canada, has now confirmed that the program has ended.

That reverses months of messaging that suggested that the program was only paused.

And those are today's headlines you can find more details on all those stories at autonews.com.

This week, we're breaking down our latest auto industry sentiment index,

which tracks how auto maker, retailer and supplier executives are feeling about the health of the overall auto industry and their corners of it.

Yesterday, we discussed falling sentiments among auto makers.

Today, our own Jake Near speaks with automotive news retail reporter Mark Holmer about how dealers are feeling.

Mark Holmer, welcome back to Daily Drive.

Thank you. It's great to be here.

So yesterday, we had Larry Velliquette on to talk about the overall index results plus how auto makers were feeling.

It was interesting to me how Larry was talking about how auto makers and suppliers are seeing their sentiments kind of go in the wrong direction or at least reflecting a tougher reality for them.

But that was offset by an increase in sentiment among retailers. So what's going on there? Why are they feeling at least a little bit better overall?

A little bit is key here. All of their scores improved a little bit in the low single digits.

But that's not where the end of itself, because when they were pessimistic earlier in the year, the situation hadn't played itself out.

And now that the terrorists are in play, now that the interest rates dropped a little bit, it's given dealerships time to plan adapts and pivot and get it done.

So basically, it's not necessarily that things are improving in a material way.

It's more about their own ability to manage the uncertainty and manage the ways that things are, you know, kind of up in the air right now.

Well, it's a little bit of both, actually. I mean, the main score was up close to 4%. And that's a good thing.

And they're more optimistic about the current state. They're more optimistic about the future state of things.

And the adaptation is part of that, but they also, the smart dealer and there are many of these who have reached this point have diversified businesses.

So it's not just selling cars. It's a good service business. It's the F and I. It's handling loans and other things.

They are making money in other places. They're selling more used cars. I mean, they're getting it done.

So you had a chance for this piece to talk with Brad Atkins, who's the CEO of Atkins Ford in Winder, Georgia.

What were some of the things that he had to say and what parts of that conversation stuck out to you?

Well, he basically is a great example of somebody who takes the long view, both backwards and forwards.

And he reflected on all the other economic crises, the dealerships have gotten through and even excelled as they got through it.

You know, we had the economic crash in 2008. We had the dot com crash at the turn of the 21st century.

And these are crises that cause problems. They figured out how to sell cars.

And his point is this is another challenge or a set of challenges and dealers can figure that out and they either did or are doing so.

And his own business, he's been expanding his service based situation.

So he can handle many, many, many vehicles in terms of issues with recalls in terms of just regular maintenance to oil.

That's just one example of how they're generating revenue in other ways.

All right. Well, Mark Holmer has been covering the retail side of things for us.

Mark, I really appreciate you joining us here on Daily Drive.

I pleasure. Thank you.

On tomorrow's show, we'll look at results from supplier executives who felt less optimistic in the third quarter.

You can find all of the findings of our Q3 auto industry sentiment index on auto news dot com.

Coming up, the industry stares down another possible chip crisis as supplier in next period gets tangled in geopolitics.

We'll dig into the problem and possible solutions next on Daily Drive.

Automotive news shift podcast brings you the latest on automotive technology trends and transformation. I'm Hannah Lutz.

And I'm Molly Boygon. We're the new co-host of shift and we're excited to bring you new conversations with experts and industry insiders like this one with Larry Dominique, president of LD Management Consultant.

Do you believe the legacy OEMs are falling into a trap? They've got to find a way to, in some ways, build new airplane while they're still in flight.

Catch shift available every Sunday, wherever you get your podcasts.

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Welcome back to Daily Drive. I'm Kellen Walker.

Automakers in the US and Europe are facing a familiar crisis, a disruption in the production of semiconductors threatens to halt the supply of critical parts.

Chipmaker next-periods complex production issues could idle assembly plants and lengthen delivery times.

Our own Jake Near talked about all of it with automotive news Europe editor Peter Siegel.

He reached Peter at his home office in Paris.

Peter Siegel coming to us from Paris really appreciate you joining us today on Daily Drive.

Hi Jake, thanks for having me.

So I know that even within our newsroom and having talked to people who follow the industry but might not know the ins and outs of the chip supply chain.

Talk about next-periods company.

How many tentacles do they have throughout the industry as a whole?

We asked the question, is this just a BMW issue? Is it just BMW Volkswagen and a couple others?

How big of a chipmaker is this?

They're actually quite big within their niche and their niche is what I would say are mid-tech chips.

They're not the highest most sophisticated you see on, for instance, self-driving cars.

But they are involved in lots of different systems, breaking, lighting, switches, wipers, things like that.

All the things that are modern car that have to work together and they are one of the companies that makes these mid-tech chips.

And they're very important. Just a quick background on them. They were spun off of Phillips.

Phillips had a division called NXP, which is one of the biggest chipmakers in general.

And then this was one of the units of NXP. So in the sort of the tech world, this is not uncommon.

These sort of commodity chips were sold off to Chinese investors in around 2017, I believe.

And that's the company that became NXperia.

So they've got about 12,500 employees, factories mostly in Europe and China.

Got it. And now they're at the center of this sort of international dispute.

What's going on there between China, the US and the Netherlands as well?

Yeah, so this is really getting into sort of a high level of geopolitics here.

But the US and China have been sort of locked in this escalating trade war, even going back way beyond the current Trump administration.

So towards the end of 2024, NXperia's parent company called Wingtech was put on a US sort of sanctions list.

It didn't seem to apply in an experience at the time because it was the parent company and things, you know, it wasn't really a warning sign.

And then from what we know and from what other news organizations have reported, the US in the spring of this year began rationing up pressure on the Dutch government.

And I should go back quickly and say, NXperia, like Phillips, is registered in the Netherlands.

So it's a Dutch company putting pressure on the Netherlands.

They look, you know, we don't think that Wingtech is a completely friendly company.

You know, with a lot of Chinese high tech companies, there are concerns about intellectual property transfer, intelligence transfer, things like that.

And the Dutch government kind of, you know, didn't do anything for a while.

And then on September 29th of this year, the US extended these sanctions that had snared Wingtech to include subsidiaries.

Ergo, NXperia was then exposed to these sanctions, which are essentially you can't export these chips.

So the very next day, the Dutch government took over NXperia.

You know, it's never went into a tizzy.

The Chinese government just wait a second.

What are you doing here?

So in retaliation for that, they imposed a do not export notice on NXperia chips from China.

And that's important because while NXperia made a lot of chips in Germany and the UK in addition to China, a lot of those chips were shipped back to China for processing.

And then sent out into the global supply chain.

So this is what sort of set off all this frenzy among automakers and suppliers.

Because as you asked earlier, it's not just BMW.

It's some Stellantis uses these, you know, Volkswagen uses them.

I would assume that every company uses them in some way, shape, or form.

And it's not that easy to say, okay, we use them or we don't because they often come from tier one or tier two suppliers in pre-packaged assemblies.

So you really have to drill down and say, okay, which tier one suppliers are using these chips?

And the tier one suppliers, such as Bosch, would have to say, okay, wish our suppliers are using these chips.

So you can see where the problem is.

And to make a long story short, several automotive trade groups have warranted only a few weeks supply of these chips left.

So if they can't get out of China, we could potentially be looking at the worst supply chain disruptions that could involve literally shutting down the plants.

And you know, we all remember what happened in COVID, the last chip crisis, Ukraine more, things like that.

So it is really quite a big deal at the moment.

Absolutely. And Peter, this is fascinating because it makes me wonder if this is sort of a, I don't know if Canary and the coal mine is the right word, but it's like as geopolitical tensions ramp up as the trade wars continue.

And as we're moving more toward things like software to find vehicles, higher tech, those sorts of things where IP is so important and technology becomes such a huge part of the industry.

You got to wonder if this is sort of one of those things where, you know, if we don't learn our lessons from this, you know, we got to figure out what to do in the future.

We're probably going to see more of this going forward.

Absolutely. And in fact, the Dutch government invoked a Cold War era law to take over the company. They were basically citing national security, saying, you know, we think that having these chips, this was implied, but not explicit.

We think that having these chips controlled by a Chinese company is not good for our national security. Now, whether that was a pretext or not, that is the law they cited.

It's been trying to create its own homegrown chip industry, but it's not so easy. I mean, these are, you know, it takes a lot of time and money to start up a chip factory.

And at the moment, the, a lot of these sizes of chips are in the hands of not necessarily just Chinese companies, but are very few large players such as TSMC, which is a Taiwanese company.

The chip part of the automotive supply chain is very naughty. And it's very hard to sort of just say, well, we should have chip, you know, a robust chip industry in the United States and Europe. It's not quite that easy.

Sure. So where do we stand now? I know that there were, there were some news last week that talks had started to try to ease these tensions or at least come to an agreement to keep the supply flowing. What's going on with that?

So according to the European auto lobbying group ASEA, their members and suppliers received a note on October 10th from an experience saying, we can't guarantee shipments of our products, which what that basically means is it's time to panic.

Yeah. Well, I've been really if you've only got a few weeks to apply these chips. So at the end of the last week, the Dutch government said they'd entered into negotiations with Chinese officials to try to find a way out of this.

On Sunday, the Dutch economic minister said that he was going to meet with Chinese counterparts in a few days.

This morning, the plot thickens, the Chinese unit of nexperia said, we're not going to pay attention to the fact that the Dutch government has taken over the European operations.

We're going to continue operating however we want to. And then the Dutch government will know they're lying. This isn't true. So this is going getting into sort of a tit for tat thing.

But I think everyone does recognize the seriousness. I mean, all kidding aside, there have been serious warnings from, you know, the European and American automotive lobby groups saying, look, you know,

we need to do something about this. This is not, this is no laughing matter.

You know, and some automakers have put in place sort of what we should we might want to call mitigation efforts that are sort of a direct outgrowth of the last chip prices.

I spoke, I got a received a message from an analyst this morning who said, you know, some of them are have learned the lesson.

And they are trying to find alternative sources or they're sort of activating these action plans that were developed, you know, after COVID and after the 2021, 22, 23 chip prices earlier.

So there's probably a way out. It may be diplomatic, but there is probably a way out. And I don't think anyone really wants to see factories. I don't even the Chinese government. There's there's probably a way out of this.

Yeah, you mentioned, you know, they're probably is way out. What happens next? Where, where's the story likely to go?

Well, I would assume that if there are meetings with the Dutch government and Chinese officials, they will attempt to find some kind of compromise, whether on the governance of nexperia.

There's a whole nother line of storyline there involving the head of wing tech was also the head of nexperia. He was a Chinese businessman.

And the Dutch government has accused him of taking money out of the Netherlands and sending it to China that bolsters operations there. It's a real soap opera drama.

But I do think I do think that there will be some sort of compromise on the governance of nexperia, whether it returns to a Dutch CEO.

Whether there isn't, there is a Chinese executive could be acceptable to the Dutch government and potentially also to the Americans. I don't know.

I don't know if I'm assuming too much by saying the Americans are probably aware of these negotiations, but I think that's fair to say.

Well, it's going to be fascinating and probably really important to see how this tangles are untangles going forward.

Peter Siegel is news editor for automotive news Europe based in France. Peter, thank you so much for joining us. Really appreciate it.

Thanks. I appreciate it. Take care.

That's daily drive for today. I'm Kellan Walker. Thanks to automotive news journalist Lindsey Van Hully and Mark Holmer for their reporting for today's podcast.

We also add reporting from David Kennedy of our sibling publication, automotive news candidate. You can get the latest news on supply chain disruptions.

Automaker earnings results and everything happening in the auto industry at autonews.com.

We'd love to hear from you. Let us know what you think of the show on the topics we cover today.

Send us an email at dailydriveatautonews.com or leave us a voicemail at 313-444-2774.

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Oct. 21, 2025 | Nexperia chip crisis explained; GM profits plunge on EV production charges

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