About the size of a grape, these semiconductors have been impacting the production of vehicles all around the world.

There are thousands of cars awaiting chips before they are able to be shipped to dealers. It has been expected to cost the global automotive industry $110 billion in revenue in 2021, this is up 81.5% from a preliminary calculation made of $60.6 billion in late January.

What is a chip?

Chips are transistors composed of silicon, a semiconductor element that is be found in many minerals. Almost every piece of technology has a chip that allows it to operate; computers, phones, TV’s, and even vehicles. These chips are used in modern cars to perform important functions like reading out throttle input, anti-lock brakes, back up cameras, navigation screens, and more. Without these chips, manufactured cars sit in lots awaiting these final puzzle pieces.

What caused the shortage?

When the global pandemic hit, it caused suppliers, automakers, and other manufactures to shut down. This eventually set us in an economic recession. Car manufactures, used to recessions, decided to cancel orders they had for car parts that required these chips. They had thought that car sales would nose dive, like they have in the past. However, car sales shot up with immense demand. With 0% financing deals, and contactless purchase and delivery being some of the biggest influencers.

When the factories opened back up, there was far more demand than there was supply. Auto makers called in to put back their orders, but the chip capacity was already used up by other consumers — phones, computers, and video games — as people shifted over to telework and stay at home life.

Which cars are affected?

Every car manufacturer is suffering from the semiconductor shortage. To make sure companies still stay profitable, and that customers are able to buy cars certain cuts had to be made. Most manufacturers are stopping the production of higher end, or larger vehicles such as SUV’s and trucks. This way they are able to focus on the production of money making vehicles. There are least a couple cars affected from each manufacturer, here are just a few.

Volkwagen Toureg, Porsche Cayenne, Audi Q7/Q8

A Volkswagen manufacturing plant located in Bratislava, Slovakia stated that they would stop the production of the larger vehicles. All the SUV’s are extremely similar in how they are built & manufactured.

Ford F150, Explorer, Mustang

Ford decided to cutback on the production of both the F150 & Explorer, but with the chip shortage that has been cut down even more. During a quarterly report, Ford stated that they would most likely produce 1.1 million less vehicles than usual. Their chief financial officer stated that there are currently over 22,000 built vehicles awaiting chips.

Range Rover Evoque, Land Rover Discovery, Jaguar F-Type, XE, XF

Land Rover and Jaguar are sister companies, and as of April 26th they stopped the production of the vehicles mentioned above. Jaguar halted their Castle Bromwich plant, and Land Rover at their Halewood factory.