Sunday, June 26, 2022

Car and chip makers in discussion over possible fix to electric car shortage

By Marnie Hunter, FOX News National Security Analyst

U.S. auto industry leaders are in discussions with chip makers over a potential fix to the shortage of silicon used in electricity-driven, battery-powered vehicles that threatens to take the electric car market by storm.

“If there’s anything more important for a company than their product then it’s their distribution network and the chip makers are being very hard to work with,” said Mike Jasny, president of the Transportation Research Board and former head of Toyota’s distribution system.

It’s especially difficult for General Motors to operate with this shortage because it relies so heavily on a single manufacturer of $500 to $1,000 chips which could be depleted within months of their consumption.

“It means we have to import a product, so it costs us at the least $20,000 more,” said Julie Magyer, GM’s vice president of electrification. “It could cost us $50,000 more if we have to import components, if we’ve got to import components from a different country, different plant, or a different part of the world,” Magyer said.

The companies that make the chips say they couldn’t make the products fast enough to meet U.S. demand. Toyota had to buy semiconductors from China, and so has Porsche. Mercedes has said the shortage is so severe that it is trying to use parts from Europe.

GM has been so concerned about the shortages it said last fall it was “effectively inactive” on Twitter on the topic for fear the tiny tweet message from the company could “stir up some discussion” about the issue.

GM and other big auto companies met with chip makers at the Supercomm trade show last fall in Boston, and the discussions remain ongoing.

GM President Dan Ammann said it’s too early to tell when the situation will be resolved, and he could not give an exact date.

The presidents of the auto industry giants said it is a consumer issue, not an industry one.

“At the end of the day, nobody is going to buy an electric vehicle when they don’t have electricity, so that should give us some pause,” said Tim Leiweke, CEO of Anschutz Entertainment Group and former CEO of Anschutz Entertainment.

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