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The Global Chip Shortage Impact on American Automakers

Chips, or semiconductor devices, are behind all of the world’s increasingly complex electrical and digital devices.

That includes well-known items like computers and smartphones, but also other products that are becoming “smarter” including appliances, watches, and especially cars.

The automotive industry accounts for a large share of global chip consumption, with modern cars having smart and complex entertainment systems, navigation, and sensors. A modern car can have anywhere from 500-1,500 different chips powering its different functions.

But when the COVID-19 pandemic hit in 2020, shifting consumer demands and a slowing economy called for a reduction in semiconductor manufacturing. And unfortunately, it can take the supply chain a long time to come back online, as much as 1.5 years.

American Manufacturers Take the Biggest Hit

As the global economy has started to bounce back and demand for digital devices has increased, the chip manufacturing supply chain has become strained on its still-low supply.

And unfortunately for automakers, cars are taking the brunt of the hit.

Manufacturer	Model	Estimated Volume Impact (10k+)
Ford	Ford F-Series	109,710
Stellantis	Jeep Cherokee	98,584
GM	Chevrolet Equinox	81,833
GM	Chevrolet Malibu	56,929
Ford	Ford Explorer	46,766
Stellantis	Jeep Compass	42,195
Ford	Ford Edge	37,521
Ford	Ford Escape	36,463
Ford	Ford Transit	26,507
Stellantis	Chrysler Voyager	25,728
Subaru	Subaru Outback	23,882
Stellantis	Chrysler Pacifica	19,601
GM	GMC Terrain	18,417
GM	Chevrolet Express	18,268
Volkswagen	Volkswagen Jetta	18,044
GM	Chevrolet Colorado	15,153
Stellantis	Ram 1500	14,793
Stellantis	Jeep Grand Cherokee	14,731
GM	Chevrolet Blazer	14,418
Stellantis	Dodge Charger	13,492
GM	Cadillac XT4	12,233
Ford	Ford Mustang	12,019
Volkswagen	Volkswagen Tiguan	12,010
Toyota	Toyota Tundra	11,411
Ford	Lincoln Nautilus	10,601
Subaru	Subaru Ascent	10,508
GM	Chevrolet Camaro	10,489
Honda	Honda Civic	10,206

Though most of the world’s major automakers have factory production in North America, American-based manufacturers are estimated to take the hardest hit.

Of the more than 1.1 million vehicles estimated to face production delays, Ford, Stellantis, and GM combine for 855,000. Ford specifically has five of the top 10 models facing delays, including the largest hit: the F-series at 109,710 delayed units.

Manufacturer	Estimated Volume Impact
Ford	324,616
General Motors	277,966
Stellantis	252,193
Subaru	45,272
Volkswagen	45,215
Honda	42,951
Nissan	41,928
Toyota	23,670
Tesla	6,418
Mazda	6,133
COMPAS	4,200
Hyundai	2,548
Volvo	1,287

Other automakers with less production based in North America are facing far softer impacts. Japanese automakers Honda, Nissan, and Toyota are estimated to take a collective hit of 108,549 delayed models, while companies like Hyundai and Volvo have less than 3,000 vehicles impacted.

The biggest reason for the discrepancy? Where each automaker sources and installs its chips. For American manufacturers in particular, the over-dependence on chips coming through China, Korea, and Taiwan has caused the current U.S. government to look for solutions, with the Senate recently approving $52 billion in subsidies for local chip manufacturing.

When the chip shortage will end is currently anybody’s guess, as manufacturers and countries are scrambling to increase capacity. Whether the financial influx from the U.S. will be enough, and how long it will take to affect a very-slow manufacturing process, remains up in the air.

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