While many industries are on the road to recovery after last year’s pandemic, the automotive sector is still struggling to return to normalcy. The semiconductor chip shortage continues to affect many automakers, including General Motors. In fact, GM halted midsize SUV production to complete 30,000 pickup trucks.
So, what’s happening with the ongoing chip shortage, and how are GM and other auto manufacturers handling the situation?
What’s the big deal with the semiconductor chip shortage?
The COVID-19 pandemic caused a semiconductor chip shortage for many businesses trying to produce products. The automotive industry stands to lose approximately $110 billion because it relies on these electronic chips for several parts of the vehicles they’ve planned to build.
As for how long it will take to get back to normal, it doesn’t appear to be anytime soon. The United States relies on countries like China and Japan for semiconductor chips even though the technology was actually invented in America.
The countries that are building these products have seen a slowdown in production because of the safety measures in response to coronavirus infections. The slowdown means it takes longer to fill orders from automakers and other businesses needing these chips.
How the chip shortage has affected GM
Like many other automakers, GM is struggling to get its hands on enough chips to produce all the vehicles it originally planned to produce this year. However, the car company shifted some of its production to meet its projected goals for producing and delivering 30,000 Colorado and Canyon midsize pickups, Detroit Free Press reported.
But to accomplish that goal, General Motors had to halt production at four of its North American plants, which produce midsize SUVs. A GM plant worker reported that the facility has tens of thousands of SUVs parked and waiting for semiconductor chips to complete production.
General Motors used up its chip stock to push its midsize pickups through to completion. Once the two-week hiatus is up, the four North American plants are due to reopen and begin production once again. To help stock dealership lots, GM is also producing vehicles without certain parts, such as wireless phone chargers, and lowering the asking price.
Are any automakers immune to the chip shortage?
Despite GM’s and other car manufacturers’ troubles, two automakers appear to be unaffected by the chip shortage. Hyundai is one of them. In fact, its sales in May 2021 were 56 percent higher than the previous May.
So how has Hyundai avoided the same problems as other brands? Some critics speculate that the automaker foresaw the shortage in plenty of time and began stockpiling chips. But it’s likelier that the company analyzed its sales charts, saw which models were the most popular, and focused its production on them while putting less popular vehicles on a backburner.
The other automaker that doesn’t seem to be affected is Tesla. Elon Musk’s EV maker sidestepped the problem by devising a different solution.
Instead of using chips, the company uses a different type of tech that allows Tesla to deliver over-the-air updates. This will likely save the company and Tesla owners quite a bit of money in the long run.
The chip shortage isn’t likely to let up this year, but automakers are doing their best to keep production going. As U.S. officials look for other sources for these chips, we can expect continued delays in getting some newer vehicles to showroom floors.