The Microchip Shortage: Its Impact on Car Manufacturers

In recent months, several microchip factories have faced disruptions due to various reasons. The Texas snowstorm was one such incident that caused widespread damage to microchip production facilities. However, another factory in Japan caught fire, further exacerbating the shortage of microchips. As a result, many car manufacturers are facing another shortage of microchips.

The chip shortage is affecting car makers in various ways. Some have stopped offering certain optional extras due to the lack of microchips needed to build them. For instance, Peugeot has had to fit normal analog dials on its 308 instead of digital dials found on other models like the 3008. Similarly, Renault downsized the digital driver's display in some models and removed wireless charging as an optional extra.

The shortage is not limited to just one car manufacturer. Many have stopped production lines altogether or paused certain models due to the microchip shortage. Mercedes has announced plans to pause production of its GLC model until it can secure more microchips. Mazda had to cut production by 7,000 cars in the first quarter of this year due to similar constraints. Mini temporarily closed its factory in Oxford where it builds three-door and five-door hatchbacks, affecting production of its new electric models.

Jaguar and Land Rover have also been impacted, causing production delays for their XE and F-Type models, as well as the Discovery Sport and Range Rover Evoque. The Volkswagen Group has built 100,000 fewer cars in 2021 than it originally planned due to chip shortages, including shutting down its factory that produces the VolksWagen Touareg.

BMW has had to slow down production of its X1 and X2 hybrid models due to chip shortages. Ford has also put a brake on its F-150 Explorer and Bronco Sport factories. Subaru reportedly closed one of its US factories for several weeks in April, while Nissan could be about to pause production of its X-Trail model at its factory in Japan.

The biggest loser among car manufacturers is Stellantis, which includes brands like Fiat Chrysler, Peugeot, Citron, and Vauxhall. The company had to temporarily slow down eight of its 44 factories around the world, resulting in a loss of 190,000 cars compared to expectations. This shortage is expected to last for some time, with estimates suggesting that around two and a half million cars could be delayed due to chip shortages.

The impact of the microchip shortage on electric car manufacturers is also significant. Electric vehicles require more complex electronics to deal with their motors and batteries than traditional petrol or diesel-powered cars. Many new electric cars come equipped with advanced connectivity features like 5G technology, which allows them to communicate with traffic lights and other cars. This technology is similar to that found in new mobile phones.

The increased demand for microchips used in these advanced connectivity systems means that car makers ordering these components will be worth more to the big microchip companies than before. However, this may not necessarily affect the production of current electric car models as much as today's cars. If you're interested in learning more about the best all-round electric car on sale today, check out our video review.

In addition to reviewing electric cars, we also offer a range of tools and resources for car buyers. Our Car Wow app is completely free and allows users to browse our reviews, compare prices, and even scan number plates using our special reader. With the app, you can save money on your new car purchase and stay up-to-date with the latest car news and trends.

"WEBVTTKind: captionsLanguage: enoh my god everybody panic there is a chip shortage how the heck are we going to eat our fish and chips oh yeah you're right uh the chip shortage i'm talking about is actually microchips and that matters to new cars because they are very high-tech like this audi rs e-tron gt thankfully this brand new car isn't actually affected by a worldwide chip shortage but some other models are and i'm going to tell you all about what is behind this chip shortage how it affects new cars and exactly which ones are affected the worst i'm matt watson and you're watching car wow buying a new car then head to car wow and my team will help you find your next car at a fair price car wow your one-stop car buying comparison site cars are getting more and more high-tech they're absolutely round with technology they're basically computers on wheels i mean this has got all the same kind of brains and stuff as my mobile phone they are absolutely packed with massive screens and all this kind of stuff needs a microchip to run them and microchips are basically tiny computers but these clever electronics aren't just in posh limousines they're in every normal cartoon in fact the latest nissan qashqai has 50 more electronic sensors on it than the old car some of these are pretty ordinary and they've been fit into cars for years stuff like the abs sensors that detect when a wheel is slipping or the oxygen sensors in the exhaust that check whether the engine is running properly but some are much more high tech like the ones that help with blind spot detection or the ones that can sense if you're about to hit a parked car and automatically makes the car apply its brakes and because they're more complicated they need more powerful computers to monitor them but these computer chips aren't like normal car parts they have to be built in ultra clean factories with no dust nor static electricity bit like how nasa builds satellites and mars rovers this means they're really expensive and take ages to produce so if there's a huge demand for these chips why is there a sudden shortage well it's because they're really hard to make and so only a few countries around the entire world can actually build them in fact around 70 percent of all the microchips used in modern cars come from just one supplier in taiwan and these factories don't just build electronics for cars they also make chips for other consumer electronics like your phone normally tech firms are first in line they want the fastest most powerful chips which are also the most expensive ones car brands don't update their tech as often as companies that make phones or tablets so they tend to use slightly older less powerful chips and these are lower priority for the chip manufacturers because they just aren't as profitable but demand also plays a big part so if you suddenly decide you don't need as many parts because you aren't building as many cars your supplier might stick you to the back of the queue and this is exactly what happened in 2020 or because of coronavirus i think back to when we were in lockdown and all the car dealerships were shut people weren't going out and buying brand new cars were they no you were sitting at home dreaming of when you could go outside again and because no one was buying a new car all the car makers had to try and save as much cash as possible loads of them closed the factories furloughed their stuff and stopped buying components and that includes the all-important microchips but while car makers were down in the dumps tech firms were onto a winner they knew that people stuck at home wanted a load of new technology to keep themselves occupied i'm talking about 5g phones new laptops and games consoles like the new playstation 5 and xbox series x so the microchip factories suddenly got loads of orders from the technology companies and fewer orders from car makers that all seems fine and dandy but the trouble arrived when people wanted to start buying cars again suddenly car manufacturers rushed to order new chips so they could ramp up production again but the chip companies couldn't just switch their production lines on and off it takes a long time and a lot of money to stop making one type of microchip and to start making another so some car makers were facing a six-month delay before they get their electronics but if you thought this was bad things got even worse this time it wasn't to do with coronavirus it was the weather's fault specifically the weather in texas you see 12 percent of the world's microchips are made in the u.s of eight and loads of these come from factories in texas but texas was hit by one of the worst winter storms in the state's history in february of this year this led to widespread power cuts which shut down some of the factories building the microchips in infineon which runs one of the factories reckoned it was going to take four months to get production back to normal after this storm and on top of that every chip in finland plan to make for the next year had already been reserved if you don't want to wait for a factory order click on the pop-out banner up there to get a car out and check out what cars dealers have in stock right now both new ones and nearly new cars anyway back to the chips amazingly the texas snowstorm wasn't the only thing that's happened this year in march another microchip factory had to shut down this time it was the renaissance plant in japan the factory actually caught fire and all these delays mean plenty of car makers are facing another shortage of microchips in some cases manufacturers have stopped offering some optional extras because they've run out of the microchips needed to build them for instance peugeot has had its problems it's had to fit normal analog dials old-school ones to its 308 rather than the digital dials you get on the 3008 and renault downsized the digital driver's display in the arcana suv and got rid of wireless charging ram the truck maker also changed the rear view camera on the 1500 pickup from a standard item to an optional extra to use fewer microchips but this was just the tip of the iceberg because plenty of manufacturers have stopped some production lines all together mercedes plans to pause glc production because it has run out of microchips for it and mazda had to cut production by 7 000 cars in the first quarter of this year for the same reason mini temporarily closed its factory in oxford where it builds three-door and five-door hatchbacks and the new mini electric was affected too jaguar and land rover have also been affected they've caused production of the xc xf and f-type as well as the discovery sport and range rover evoque the volkswagen group has already built 100 000 fewer cars in 2021 than it originally planned partly because it shut the factory that makes the volkswagen touareg the porsche kn and the audi q7 and q8 bmw has had to slow down production of the x1 and x2 hybrids due to chip shortages and ford put the brakes on its f-150 explorer and bronco sport factories subaru reportedly closed one of its u.s factories for the last few weeks of april and nissan could be about to pause production of its x-trail factory in japan but one of the biggest losers is stellantis this group includes brands like fiat chrysler peugeot citron and vauxhall it had to temporarily slow down eight of its 44 factories around the world this meant it built 190 000 fewer cars than it was expecting to in the first quarter of this year so how long is this shortage going to last well the microchip maker infineon reckons that around two and a half million cars could be delayed by the chip shortage in the first half of this year and other estimates say that this number could rise to five million cars by the end of 2021. now i can believe that especially because four reckons it'll lose out on building around one million cars just on its own by the end of this year but it's not all bad news some brands such as hyundai weren't affected so much by the shortage because they cunningly stockpiled microchips in advance and you can bet your bottom dollar that after all these delays many other manufacturers will be doing the same in future but there's another side to this story and it's to do with electric cars like this audi e-tron gt evs require more complicated electronics to deal with their motors and batteries than a normal petrol diesel-powered car and most new electric cars can be loads of new connectivity features like the 5g technology in the new bmw ix that lets it communicate with traffic lights and other cars this is pretty similar to the tech in new mobile phones and that means that car makers ordering fancy 5g components will be worth more to the big microchip companies than before so although demand for microchips isn't going away anytime soon the next generation of high-tech evs might not be so affected by delays as today's models now if you want to see what i think is the best all-round electric car on sale today put a link up there she'll be popping out in the top right hand corner of the screen you can go watch the video is it this or is it not if you enjoyed the video please give it a like also comment below of any kind of other videos you'd like us to do if you want to watch some more videos click on the windows there and if you click on the box you can download the car wow app it's completely free you can use it to like browse all our reviews and see how much money we can save you on a new car also it has a special number plate reader so you can scan any card's number plate and it will tell you how much that car is currently worthoh my god everybody panic there is a chip shortage how the heck are we going to eat our fish and chips oh yeah you're right uh the chip shortage i'm talking about is actually microchips and that matters to new cars because they are very high-tech like this audi rs e-tron gt thankfully this brand new car isn't actually affected by a worldwide chip shortage but some other models are and i'm going to tell you all about what is behind this chip shortage how it affects new cars and exactly which ones are affected the worst i'm matt watson and you're watching car wow buying a new car then head to car wow and my team will help you find your next car at a fair price car wow your one-stop car buying comparison site cars are getting more and more high-tech they're absolutely round with technology they're basically computers on wheels i mean this has got all the same kind of brains and stuff as my mobile phone they are absolutely packed with massive screens and all this kind of stuff needs a microchip to run them and microchips are basically tiny computers but these clever electronics aren't just in posh limousines they're in every normal cartoon in fact the latest nissan qashqai has 50 more electronic sensors on it than the old car some of these are pretty ordinary and they've been fit into cars for years stuff like the abs sensors that detect when a wheel is slipping or the oxygen sensors in the exhaust that check whether the engine is running properly but some are much more high tech like the ones that help with blind spot detection or the ones that can sense if you're about to hit a parked car and automatically makes the car apply its brakes and because they're more complicated they need more powerful computers to monitor them but these computer chips aren't like normal car parts they have to be built in ultra clean factories with no dust nor static electricity bit like how nasa builds satellites and mars rovers this means they're really expensive and take ages to produce so if there's a huge demand for these chips why is there a sudden shortage well it's because they're really hard to make and so only a few countries around the entire world can actually build them in fact around 70 percent of all the microchips used in modern cars come from just one supplier in taiwan and these factories don't just build electronics for cars they also make chips for other consumer electronics like your phone normally tech firms are first in line they want the fastest most powerful chips which are also the most expensive ones car brands don't update their tech as often as companies that make phones or tablets so they tend to use slightly older less powerful chips and these are lower priority for the chip manufacturers because they just aren't as profitable but demand also plays a big part so if you suddenly decide you don't need as many parts because you aren't building as many cars your supplier might stick you to the back of the queue and this is exactly what happened in 2020 or because of coronavirus i think back to when we were in lockdown and all the car dealerships were shut people weren't going out and buying brand new cars were they no you were sitting at home dreaming of when you could go outside again and because no one was buying a new car all the car makers had to try and save as much cash as possible loads of them closed the factories furloughed their stuff and stopped buying components and that includes the all-important microchips but while car makers were down in the dumps tech firms were onto a winner they knew that people stuck at home wanted a load of new technology to keep themselves occupied i'm talking about 5g phones new laptops and games consoles like the new playstation 5 and xbox series x so the microchip factories suddenly got loads of orders from the technology companies and fewer orders from car makers that all seems fine and dandy but the trouble arrived when people wanted to start buying cars again suddenly car manufacturers rushed to order new chips so they could ramp up production again but the chip companies couldn't just switch their production lines on and off it takes a long time and a lot of money to stop making one type of microchip and to start making another so some car makers were facing a six-month delay before they get their electronics but if you thought this was bad things got even worse this time it wasn't to do with coronavirus it was the weather's fault specifically the weather in texas you see 12 percent of the world's microchips are made in the u.s of eight and loads of these come from factories in texas but texas was hit by one of the worst winter storms in the state's history in february of this year this led to widespread power cuts which shut down some of the factories building the microchips in infineon which runs one of the factories reckoned it was going to take four months to get production back to normal after this storm and on top of that every chip in finland plan to make for the next year had already been reserved if you don't want to wait for a factory order click on the pop-out banner up there to get a car out and check out what cars dealers have in stock right now both new ones and nearly new cars anyway back to the chips amazingly the texas snowstorm wasn't the only thing that's happened this year in march another microchip factory had to shut down this time it was the renaissance plant in japan the factory actually caught fire and all these delays mean plenty of car makers are facing another shortage of microchips in some cases manufacturers have stopped offering some optional extras because they've run out of the microchips needed to build them for instance peugeot has had its problems it's had to fit normal analog dials old-school ones to its 308 rather than the digital dials you get on the 3008 and renault downsized the digital driver's display in the arcana suv and got rid of wireless charging ram the truck maker also changed the rear view camera on the 1500 pickup from a standard item to an optional extra to use fewer microchips but this was just the tip of the iceberg because plenty of manufacturers have stopped some production lines all together mercedes plans to pause glc production because it has run out of microchips for it and mazda had to cut production by 7 000 cars in the first quarter of this year for the same reason mini temporarily closed its factory in oxford where it builds three-door and five-door hatchbacks and the new mini electric was affected too jaguar and land rover have also been affected they've caused production of the xc xf and f-type as well as the discovery sport and range rover evoque the volkswagen group has already built 100 000 fewer cars in 2021 than it originally planned partly because it shut the factory that makes the volkswagen touareg the porsche kn and the audi q7 and q8 bmw has had to slow down production of the x1 and x2 hybrids due to chip shortages and ford put the brakes on its f-150 explorer and bronco sport factories subaru reportedly closed one of its u.s factories for the last few weeks of april and nissan could be about to pause production of its x-trail factory in japan but one of the biggest losers is stellantis this group includes brands like fiat chrysler peugeot citron and vauxhall it had to temporarily slow down eight of its 44 factories around the world this meant it built 190 000 fewer cars than it was expecting to in the first quarter of this year so how long is this shortage going to last well the microchip maker infineon reckons that around two and a half million cars could be delayed by the chip shortage in the first half of this year and other estimates say that this number could rise to five million cars by the end of 2021. now i can believe that especially because four reckons it'll lose out on building around one million cars just on its own by the end of this year but it's not all bad news some brands such as hyundai weren't affected so much by the shortage because they cunningly stockpiled microchips in advance and you can bet your bottom dollar that after all these delays many other manufacturers will be doing the same in future but there's another side to this story and it's to do with electric cars like this audi e-tron gt evs require more complicated electronics to deal with their motors and batteries than a normal petrol diesel-powered car and most new electric cars can be loads of new connectivity features like the 5g technology in the new bmw ix that lets it communicate with traffic lights and other cars this is pretty similar to the tech in new mobile phones and that means that car makers ordering fancy 5g components will be worth more to the big microchip companies than before so although demand for microchips isn't going away anytime soon the next generation of high-tech evs might not be so affected by delays as today's models now if you want to see what i think is the best all-round electric car on sale today put a link up there she'll be popping out in the top right hand corner of the screen you can go watch the video is it this or is it not if you enjoyed the video please give it a like also comment below of any kind of other videos you'd like us to do if you want to watch some more videos click on the windows there and if you click on the box you can download the car wow app it's completely free you can use it to like browse all our reviews and see how much money we can save you on a new car also it has a special number plate reader so you can scan any card's number plate and it will tell you how much that car is currently worth\n"