The chip shortage took 180,000 cars off the assembly line

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(Photo: Martin Geiger/Unsplash)
The seemingly perpetual chip shortage has taken another prisoner: new vehicles. With semiconductors in high demand and automakers unable to get enough, more than 100,000 vehicles are expected to roll off assembly lines this week in North America alone. Worldwide, the total number of Nixed vehicle assemblies is around 180,000.

AutoForecast Solutions (AFS), a private auto market forecast database, has taken it upon itself to provide updates on vehicle-related chip supply fluctuations since the shortage began. According to Automotive News, the latest update is ugly: 180,000 vehicles disappeared from assembly lines around the world this week, marking the biggest drop in AFS production in recent years.

Europe was previously the most affected production region on the AFS list; So far, 1.04 million vehicles have rolled off its assembly line this year. But hitting 100,000 cars in North America has given it a not-so-glamorous place. Year-to-date North American new vehicle production losses now total 1.06 million. AFS estimates that another 800,000 cars will be rolled out of factories worldwide before the end of 2022.

(Photo: Simon Kadula/Unsplash)

For those who have put off buying new cars, this is bad news. Vehicle prices have been alarmingly high over the past few months due to COVID-19 production adjustments and silicon shortages (which in many cases are intertwined). As used car prices seem to be coming back down to earth, Kelly Blue Book reports that new car prices are higher than ever, with an average price of $48,043 per car last month. With chip shortages expected to stretch into 2024, new car buyers will see relief anytime soon—that is, unless the global economy experiences a “slowdown,” which AFS directors expect to happen sometime in 2023.

The chip shortage didn’t just affect the availability of the entire vehicle; How automakers evaluate their luxury feature offerings has also changed. General Motors paused installation of heated seats and heated steering wheels in November due to limited chip availability. Only its high-end, full-size trucks included these features, which didn’t help buyers’ budget concerns. (Fortunately, this has nothing to do with BMW’s pay-to-play heated seat offerings, which are causing global outrage.)

Some hope the CHIPS Act, which was sent to President Biden’s desk late last month, will help alleviate the US chip shortage. The bill allocates $52 billion to support U.S. silicon manufacturing efforts and offers tax credits to companies working toward the same mission. It is expected that Intel (whose Ohio “megafab” was on hold before the bill passed) will ramp up production to compete with Taiwan’s TSMC. But it’s a long-term solution, and the odds appear slim that automakers — in the U.S. or other parts of the world — will see an increase in chip availability in the coming months.

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