Latest News

Volkswagen executive sees global chip shortage running well into 2022

Economy1 hour ago (Oct 19, 2021 17:30)

© Reuters. FILE PHOTO: Staff wear protective masks at the Volkswagen assembly line in Wolfsburg, Germany, April 27, 2020. Swen Pfoertner/Pool via REUTERS/File Photo/File Photo

By Ben Klayman

DETROIT (Reuters) -Volkswagen AG’s top Americas executive said on Tuesday the global semiconductor chip shortage will run well into next year.

“Without a doubt, this shortage is going to go well into 2022, at least the second half of ’22,” Volkswagen (DE:VOWG_p) Group of America Chief Executive Scott Keogh said at the Reuters Events Automotive Summit.

The shortage of chips has led automakers around the world to curtail vehicle production, but also driven up profit as vehicle prices have risen. Carmakers use chips in everything from brake sensors to power steering to entertainment systems.

Keogh added that while the issue may ease in the fourth quarter of this year, the industry still cannot meet market demand for vehicles.

He said one likely shift in the near future is that automakers will try to reduce the number of chips needed in each part of the cars and trucks.

“Historically, we’ve made decision as if chips were nearly infinite, so each and every module required a chip, every window lift, every modulator,” he said. “There’s ways that we start to look at it when we develop the cars, can we do more modules with less chips? It can be done. These are all things we are looking at.”

As for talk that the U.S. government should simply fund the building of additional chip plants, Keogh said it will take billions of dollars and at least four years to do that. “I don’t know if picking up a phone to the government is the solution on the chip shortage.”

While chips are the current challenge, the next will be the growing demand for electric vehicles and the batteries needed to power them, Keogh said.

While VW’s plant in Chattanooga, Tennessee, will obtain its batteries from SK Innovation’s Georgia plant, the German automaker will have additional announcements regarding batteries when it starts rolling out the next wave of EVs, he said.

Volkswagen executive sees global chip shortage running well into 2022

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

China Evergrande shelves stake sale, Kaisa clattered by downgrade

Previous article

NYC to See Modest Sales-Tax Hit From Remote Work, Stringer Says

Next article

You may also like


Leave a reply

Your email address will not be published.

More in Latest News