Europe’s automotive sector has become too reliant on Asia and other regions for vital components such as semiconductors and battery cells, Bosch’s outgoing chairman told a German newspaper.

Automotive chips and battery cells have become the two most important components in the age of electric and autonomous vehicles, forcing European car makers to rely on Asian suppliers as local industry has been slow to build capacity close by.

“Yes, we have become too dependent on other regions, and a change of course is needed,” Bosch’s supervisory board chairman Franz Fehrenbach, who steps down at the end of the year, told Frankfurter Allgemeine Zeitung.

“However, this is not the fault of politics, but is related to cost optimisation in the supply chain,” he said.

“The car industry is slowly asking itself how raw material supply will look like, particularly for battery cells.”

Deal with VW

Volkswagen’s software unit Cariad and automotive supplier Bosch are nearing an agreement to cooperate on automotive software, Handelsblatt reported, citing company sources.

Volkswagen plans to invest a triple-digit million euro amount as part of the deal, the paper added. Volkswagen has bundled all its software efforts into Cariad, hoping it can challenge Tesla and Alphabet in a field in which it has not traditionally been active.