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The Global Chip Shortage Impact on American Automakers

Chips, or semiconductor devices, are behind all of the world’s increasingly complex electrical and digital devices.

That includes well-known items like computers and smartphones, but also other products that are becoming “smarter” including appliances, watches, and especially cars.

The automotive industry accounts for a large share of global chip consumption, with modern cars having smart and complex entertainment systems, navigation, and sensors. A modern car can have anywhere from 500-1,500 different chips powering its different functions.

But when the COVID-19 pandemic hit in 2020, shifting consumer demands and a slowing economy called for a reduction in semiconductor manufacturing. And unfortunately, it can take the supply chain a long time to come back online, as much as 1.5 years.

American Manufacturers Take the Biggest Hit

As the global economy has started to bounce back and demand for digital devices has increased, the chip manufacturing supply chain has become strained on its still-low supply.

And unfortunately for automakers, cars are taking the brunt of the hit.

Manufacturer Model Estimated Volume Impact (10k+)
Ford Ford F-Series 109,710
Stellantis Jeep Cherokee 98,584
GM Chevrolet Equinox 81,833
GM Chevrolet Malibu 56,929
Ford Ford Explorer 46,766
Stellantis Jeep Compass 42,195
Ford Ford Edge 37,521
Ford Ford Escape 36,463
Ford Ford Transit 26,507
Stellantis Chrysler Voyager 25,728
Subaru Subaru Outback 23,882
Stellantis Chrysler Pacifica 19,601
GM GMC Terrain 18,417
GM Chevrolet Express 18,268
Volkswagen Volkswagen Jetta 18,044
GM Chevrolet Colorado 15,153
Stellantis Ram 1500 14,793
Stellantis Jeep Grand Cherokee 14,731
GM Chevrolet Blazer 14,418
Stellantis Dodge Charger 13,492
GM Cadillac XT4 12,233
Ford Ford Mustang 12,019
Volkswagen Volkswagen Tiguan 12,010
Toyota Toyota Tundra 11,411
Ford Lincoln Nautilus 10,601
Subaru Subaru Ascent 10,508
GM Chevrolet Camaro 10,489
Honda Honda Civic 10,206

Though most of the world’s major automakers have factory production in North America, American-based manufacturers are estimated to take the hardest hit.

Of the more than 1.1 million vehicles estimated to face production delays, Ford, Stellantis, and GM combine for 855,000. Ford specifically has five of the top 10 models facing delays, including the largest hit: the F-series at 109,710 delayed units.

Manufacturer Estimated Volume
Impact
Ford 324,616
General Motors 277,966
Stellantis 252,193
Subaru 45,272
Volkswagen 45,215
Honda 42,951
Nissan 41,928
Toyota 23,670
Tesla 6,418
Mazda 6,133
COMPAS 4,200
Hyundai 2,548
Volvo 1,287

Other automakers with less production based in North America are facing far softer impacts. Japanese automakers Honda, Nissan, and Toyota are estimated to take a collective hit of 108,549 delayed models, while companies like Hyundai and Volvo have less than 3,000 vehicles impacted.

The biggest reason for the discrepancy? Where each automaker sources and installs its chips. For American manufacturers in particular, the over-dependence on chips coming through China, Korea, and Taiwan has caused the current U.S. government to look for solutions, with the Senate recently approving $52 billion in subsidies for local chip manufacturing.

When the chip shortage will end is currently anybody’s guess, as manufacturers and countries are scrambling to increase capacity. Whether the financial influx from the U.S. will be enough, and how long it will take to affect a very-slow manufacturing process, remains up in the air.



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