The automotive industry is on the brink of a significant cybersecurity reckoning. As vehicles evolve into software-driven, connected platforms, the cyber risk landscape has expanded rapidly, and regulatory scrutiny is following closely behind.

The EU’s NIS2 Directive, which came into force in January 2023, marks a decisive shift in how digital risk is governed across critical sectors, including transport and automotive manufacturing.

What makes NIS2 particularly impactful is its emphasis on the supply chain. It does not merely target Original Equipment Manufacturers (OEMs); it places direct and indirect obligations on every level of the supply ecosystem — from Tier 1s to Tier 3s and beyond. For many suppliers, this will require a fundamental shift in how cybersecurity is understood, prioritized, and implemented.

In simple terms: those who cannot meet the new standards may no longer be viable business partners.

In this article, we will explore what NIS2 requires of automotive suppliers, why OEMs will demand demonstrable compliance, and what actions suppliers must take to adapt, or risk being excluded from future procurement cycles.

The Hidden Cybersecurity Weakness in Automotive Supply Chains

The automotive supply chain is uniquely complex. Vehicles are assembled using thousands of components sourced from an intricate web of suppliers, many of whom are small or mid-sized firms with limited cybersecurity capabilities.

Despite the digital transformation underway across the sector, many suppliers still operate with legacy systems, informal security practices, and minimal visibility into their digital assets or threat landscape.

This latent risk is no longer acceptable. As vehicles become increasingly connected, and as regulatory frameworks like NIS2 mature, automotive suppliers are being brought under the cybersecurity spotlight.

What was once considered a “back-office IT issue” has now become a strategic and regulatory priority.

A Summary of NIS2 Obligations for the Automotive Sector

NIS2 expands on the original NIS Directive by introducing a broader scope, stricter requirements, and stronger enforcement mechanisms. Organizations covered by the directive fall into two categories: essential and important entities.

For the automotive sector, this includes:

• Vehicle manufacturers and OEMs (essential)
• Parts suppliers and service providers (important, if they meet certain size and sector criteria)

Key obligations under NIS2 include:

• Cyber risk management and governance: Companies must implement appropriate technical and organizational measures, including policies, training, and board-level accountability.
• Supply chain security: Organizations are expected to assess and manage the cybersecurity risks posed by their suppliers and service providers.
• Incident reporting: Security incidents must be reported to national authorities within 24 hours of becoming aware of them.
• Business continuity and recovery planning: Entities must have documented strategies for operational resilience in the event of disruption.
• Executive accountability: Company directors can be held personally liable for non-compliance, with the possibility of sanctions and mandatory corrective action.

Notably, NIS2 applies regardless of whether an organization is directly attacked. If a supplier’s security failure affects an essential entity’s operations, both parties may face regulatory consequences.

Why OEMs Will No Longer Tolerate Non-Compliant Suppliers

With NIS2 enforcement on the horizon, OEMs are rapidly reassessing the cybersecurity posture of their supply networks. This is not a matter of preference; it is a matter of legal obligation.

OEMs will be required to demonstrate due diligence and ongoing oversight of their third-party cybersecurity risks. This will drive a major shift in procurement strategy, including:

• Requiring cybersecurity questionnaires and evidence of controls during vendor onboarding
• Incorporating security clauses into contracts, including rights to audit and terminate
• Mandating incident notification procedures and SLAs for recovery
• Expecting suppliers to align with recognized frameworks (e.g., ISO/IEC 27001, ISO/SAE 21434)

Suppliers that cannot provide adequate documentation or demonstrate a clear security roadmap will increasingly be seen as liabilities and may be phased out of future engagements.

In essence, cybersecurity maturity is becoming a business requirement, not a competitive differentiator.

The Business Case for Cybersecurity Investment

For many small and mid-sized suppliers, meeting NIS2 requirements may seem overwhelming. Limited resources, lack of in-house expertise, and operational complexity can make compliance feel out of reach.

Cybersecurity investments should be reframed not as a regulatory expense, but as a strategic enabler, one that supports customer retention, market access, and long-term resilience.

Forward-thinking suppliers are already taking proactive steps to:

• Appoint a cybersecurity lead or engage a virtual Chief Information Security Officer (vCISO)
• Perform risk assessments and create actionable remediation plans
• Align their policies and procedures with ISO/IEC 27001 or similar standards
• Document their incident response and business continuity capabilities
• Educate executive leadership on emerging regulatory risks

In many cases, these initiatives have even helped suppliers win new business, as OEMs increasingly seek partners who can demonstrate robust and auditable cybersecurity practices.

Practical Guidance: What Automotive Suppliers Should Do Now

To avoid falling behind, suppliers must treat NIS2 readiness as a strategic initiative — not just a compliance project.

Here is a practical roadmap to begin maturing your cybersecurity posture:

Determine Applicability

• Assess whether your organization qualifies as an “important entity” based on sector, size, and services.
• Understand your regulatory obligations and reporting requirements under NIS2.

Establish Accountability

• Assign cybersecurity responsibility to a senior executive.
• Ensure board-level visibility and oversight of cyber risk.

Map Your Risk Surface

• Identify critical systems, data flows, and operational dependencies.
• Evaluate third-party risks and understand potential downstream impact.

Develop Core Policies and Procedures

• Formalize policies around access control, data protection, incident response, and business continuity.
• Train staff on security awareness and reporting procedures.

Test Your Readiness

• Conduct tabletop exercises to validate incident response capabilities.
• Simulate real-world scenarios to uncover gaps in detection, escalation, and recovery.

Engage External Expertise

• Consider partnering with a virtual or fractional CISO for strategic guidance.
• Leverage existing frameworks and templates to speed up implementation.

Build an Audit-Ready Documentation Trail

• Record your activities, decisions, and controls.
• Ensure that compliance can be demonstrated if requested by regulators or customers.

Importantly, suppliers should not wait for OEMs to initiate these conversations. Taking initiative will signal maturity, responsibility, and readiness, qualities that are increasingly valued in today’s automotive ecosystem.

Conclusion

NIS2 is a transformative directive that is reshaping the way cybersecurity is managed across the European Union, and the automotive sector is one of the most significantly affected. Suppliers that view this as an IT compliance issue will miss the bigger picture.

In truth, NIS2 is about business continuity, resilience, and long-term reputation. It is about earning and maintaining the trust of OEMs, regulators, and end users.

Those who choose to proactively adapt by aligning with industry best practices, strengthening their governance, and investing in cyber risk management will be well-positioned to thrive in this new regulatory environment.

What about those who ignore the warning signs, delay action, or continue relying on outdated assumptions about responsibility?

They may soon find themselves cut out of the supply chain entirely. Now is the time for suppliers to professionalize their cybersecurity posture.