A new survey conducted last month by Automotive News about the global chip shortage finds that almost everyone in the auto industry thinks it’s a big problem.
Today, according to the survey, 53 percent of respondents said they source their chips from outside the U.S., and 55 percent are looking for alternative chip sources outside the country.
Changes are happening, of course, from temporary production pauses and a shift to models that are either in high demand or require fewer chips.
The auto industry is fully aware just how bad the current chip shortage is. Anecdotally, this has been clear for a while. Ford CEO Jim Farley, for example, recently said that the chip shortage is “perhaps the greatest supply shock” he’s ever seen. Automotive News used that quote in a new survey of automakers and suppliers called Examining the Global Chip Shortage, which gives us plenty of survey data to back up the feeling that this is a big, big deal.
Perhaps the most surprising number in the survey is that only—yes, only—93 percent of respondents said that they think the chip shortage will have a severe impact on the auto industry. The survey was conducted a month ago, before recent estimates put the shortage’s impact on the auto industry at $110 billion in lost revenue this year. But even in January, the estimates were around $50 billion, which apparently wasn’t severe enough for 7 percent of respondents.
There’s also the feeling that the chip shortage will stretch out for most of the rest of the year. Almost three-quarters of respondents, 72 percent, said they expect the chip shortage crisis to impact the industry for at least six months.
Just a reminder that the shortage of the chips, used in cars, computers, and other products, was caused by worldwide demand for electronic goods that intensified because of the coronavirus pandemic, along with inadequate planning in the supply chain and weather problems. As the New York Timespointed out, a new vehicle can have up to 100 of these semiconductor chips on board; they’re used (and needed) in components from touchscreens to transmissions.
While there have been efforts to start making more semiconductors in the U.S., newly proposed plants will take time to build and start producing chips. The survey provides us with some insight into where automakers and suppliers are getting their chips now: 53 percent get them from outside the U.S. today and 55 percent are looking to source chips from outside the U.S. in the future. Forty-eight percent said they’d rather buy chips from domestic suppliers.
Survey respondents were somewhat uncertain about which segments of the industry will be most impacted by the shortage. Half (49 percent) said it will be the automakers, while 30 percent believe dealers and retailers will be hardest hit, and 23 percent said it will be the suppliers.
If there are bright spots to be found in the numbers, they lie in the way the industry is adapting to the situation.
WASHINGTON — Sen. Bernie Sanders, I-Vt., drew his red lines on how to pay for a potential infrastructure compromise bill Sunday, as Democratic progressives continue to hesitate over joining the bipartisan deal on one of President Joe Biden’s biggest legislative priorities.
Twenty-one senators, including 11 Republicans, have coalesced around a broad framework that invests in hard infrastructure spending — roads, bridges and other projects — but not in the broader proposals that Democrats are seeking in their own proposals, such as climate change mitigation and new investments in areas like child care.
In an interview on NBC News’ “Meet the Press,” Sanders wouldn’t commit to supporting or opposing the plan, largely because the final details still need to be negotiated. But he made it clear there are some red lines he won’t cross to support it.
“What is in the bipartisan bill in terms of spending is, from what I can see, mostly good. It is roads and bridges, and we need to do that. That is what we are proposing in our legislation, but in much greater numbers,” he said.
“One of the concerns that I do have about the bipartisan bill is how they are going to pay for their proposals, and they’re not clear yet. I don’t know that they even know yet, but some of the speculation is raising a gas tax, which I don’t support, a fee on electric vehicles, privatization of infrastructure. Those are proposals that I would not support.”
Congress has gone back and forth on infrastructure negotiations for months — Biden has called for a $4 trillion plan, while Republicans have been pitching their own proposals at less than a quarter of the cost. While the bipartisan group continues to iron out legislation, Democrats are readying an attempt to pass their own plan without any Republican votes in case negotiations fail.
Some progressives have balked at working with Republicans on a bill that doesn’t include priorities like climate change mitigation.
But many Republicans, like Sen. Rob Portman, R-Ohio, are similarly wary of legislation they see as too broad.
In an interview on “Meet the Press,” Portman said that while the group of 21 senators, of which he’s a part of, are still on board, and he criticized the Democratic plan as a “$6 trillion grab bag of progressive priorities.” Portman said the bipartisan group is trying to use “creative” solutions to avoid raising taxes and said that if Biden and other Democrats don’t support the group’s plan to index the gas tax to inflation, they should propose other ways to pay for the spending that don’t raise taxes.
“What we don’t want to do is hurt the economy right now, as we are coming out of the pandemic, by raising taxes on working families,” he said.
Portman also threw cold water on a different potential compromise — a proposal by Sen. Joe Manchin, D-W.Va., on voting rights and election security. Portman said he appreciates Manchin’s attempt to find “some middle ground” but
Republican Senator Susan Collins of Maine spoke about funding for a bipartisan infrastructure deal, including proposed fees for electric vehicle owners for acting as “free riders” by not paying a gas tax.
“There would be a provision for electric vehicles to pay their fair share of using our roads and bridges. Right now, they are literally free riders because they’re not paying any gas tax,” Collins said during an appearance on CBS News’ Face the Nation Sunday.
Newsweek reached out to Collins for clarification on the proposed fees, whether intending additional fees or using the ones already in existence for funding.
Collins’ comments have received criticism on Twitter, with some users accusing Collins of not representing citizens’ best interests, and some electric vehicle owners complaining about fees already in place.
Vox journalist Aaron Rupar called the proposal “completely absurd” in a tweet.
Another user wrote: “@SenatorCollins Why would you have fees on electric vehicles? Why are Republicans always trying to drag us backwards? Fix the tax system. Tax the multi-billionaires. Jesus Christ, we’re sick of this s**t. And yes, people, I’m embarrassed to say it’s true, Collins is my senator.”
The National Conference of State Legislatures (NCSL) website details fees already imposed by 28 states for electric vehicle users to make up for a lack of revenue in gas tax. The special registration fees are typically in addition to traditional registration fees, and 14 states have imposed a fee for plug-in hybrid vehicles that operate on both gas and electricity.
The annual fees for an electric vehicle range from $50 in Hawaii and Colorado to $225 in Washington. In 2019, Alabama, Arkansas, Ohio and Wyoming enacted bills that set or increased fees for electric vehicles to $200 a year, the NCSL reported.
Fees for hybrid vehicles that use both electricity and gas were increased from $32 to $48.75 in Iowa this year. While South Carolina does not have an annual fee, electric vehicles require a $120 fee and hybrid vehicles a $60 fee every two years.
Illinois proposed increasing the electric vehicle fee to $1,000 in 2019, when the fee had previously been an additional $17.50 on top of regular registration fees, the Chicago Tribune reported. It was ultimately settled at $258 a year, which was a $100 fee on top of the $158 regular registration fee.
The registration fees were created to make up for a lack of revenue from gas taxation, which helps pay for highway repairs and improvements. In 2019 and 2020, at least 19 states considered legislation that would add road user charges as an additional means of collecting infrastructure funding from electric vehicle owners, the NCSL reported.