Ford Boss Warns New Cars Will Be More Expensive, And There’s Even More Bad News

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Pretty much every single carmaker out there, including large companies like Ford and General Motors, felt the wrath of the global chip shortage, and unfortunately for everyone, the existing forecasts aren’t at all good news.

Almost everybody in the industry expects the shortage to continue until at least 2023, and Ford Europe chairman of the management board Gunnar Herrmann is even more pessimistic.

Speaking with CNBC, Herrmann said he doesn’t expect the chip shortage to be over until 2024, so in theory, we still have some three years of struggle for the automotive sector.

But the Ford official says it’s impossible for anyone out there to tell when the whole thing would come to an end, so eventually, the shortage could take even more years to deal with unless more companies invest in the manufacturing of semiconductors.

The increased focus on electric cars only makes the matter worse, as they use more chips than a traditional vehicle. For example, a Ford Focus powered by a conventional gasoline engine comes with around 300 chips, whereas an EV manufactured by the American firm is said to rely on an army of no less than 3,000 chips supposed to power the advanced systems installed on the car.

But at the end of the day, Herrmann warns that new car prices would eventually go up mostly as a result of the increasing cost of raw materials. So while the chip shortage might seem to be the biggest concern right now, it’s only part of the problem, as carmakers also have to deal with the increasing price and the short supply of materials like plastics, steel, and lithium used for batteries.

While the demand remains strong, carmakers have a hard time filling all orders. Just last week, Ford announced it’s suspending the production of the F-150 truck due to the lack of semiconductors.