HOW NEW CAR SUPPLY GOT SMASHED BY A GLOBAL COMPUTER CHIP SUPPLY SHORTAGE

EV Channels Review

This report by John Cadogan delves into the critical global semiconductor shortage impacting new car availability. Cadogan explains that the shortage stems from a surge in demand for chips from consumer electronics during global lockdowns, while the automotive industry, which only utilizes about 10% of global chip manufacturing capacity, lacks leverage. He criticizes car manufacturers for their 'just-in-time' manufacturing and poor risk management decisions over the past decade, stating they are architects of their own vulnerability rather than victims. While acknowledging the impact of COVID-19, Cadogan emphasizes that pre-existing industry downturns and prior throttling of chip orders exacerbated the issue. He highlights Toyota and Hyundai as exceptions due to their stronger supply positions. The review concludes that the crisis could have been largely averted with better inventory management and supply chain diversification, suggesting carmakers have learned little from past disruptions.