Next year could be the light at the end of the tunnel for the chip shortage that slashed vehicle inventory for the past two years — and that could mean good news for weary car buyers.
The chip shortage has pummeled the global auto industry for years, depressing dealership inventory levels and driving up new and used vehicle prices. But experts from AutoForecast Solutions say that by the end of 2022, the semiconductor shortage won't be nearly as bad as it was last year. Better yet, 2023 could look even rosier.
Since 2020, auto companies have sacrificed production levels and valuable features like heated seats, while prioritizing money-making vehicles.
In 2021, automakers built 3.23 million fewer vehicles than expected in North America because of the chip shortage. This year, that shortfall's on pace to hit about 1.5 million, per an AutoForecast Solutions estimate last week.
Chipmakers have raced to ramp up their production of these critical components, which power smartphones, household electronics, and the tech-filled cars of future product lines. They're especially important for electric vehicles, which are even more technologically advanced than gas-powered ones. Automakers are already navigating supply shortages as they relate to EV batteries, and can't afford further constraints inhibiting their progress.
Rivian "saw a number of challenges in terms of the semiconductor space, as well as just overall ramping of the volume within our supply base," CEO RJ Scaringe said in a second-quarter earnings call earlier this year.
(One benefit to electric, though, is that EVs require the more complex chips that chip companies are eager to make, unlike the antiquated, less profitable chips that older cars require.)
Next year's potential chip shortage respite could bring relief to car shoppers if inventory levels recover, pushing down prices.