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United States: Targets for Vehicle Electrification will be Missed Without Investments in Semiconductor Manufacturing

The US isn't on its way to reach its goals for electrification due to the chip shortage

  • The semiconductor shortage is affecting electric cars disproportionally

  • The government’s goal is to make half of all vehicles sold in 2030 zero-emission vehicles

  • Massive investments to boost local production of semiconductors is needed

The commerce secretary said that the United States’ government will not be able to reach its goals for the electrification of vehicles without massive investments in semiconductor production.

The shortage of semiconductors and electronic chips that is slowing down automotive production worldwide since the beginning of 2020 is affecting electric vehicles disproportionately because they require more chips than equivalent gasoline powered vehicles.

This leads to higher prices and lower sales of EVs, which will prevent many countries from reaching their targets for the electrification of their vehicle fleet.

The United States is currently not on the way to achieve its goal of making half of all new vehicles sold inside its borders zero-emissions vehicles by 2030.

In order to reverse this tendency and have a chance to reach these numbers, large sums will need to be invested in local semiconductor production that could provide enough parts to rapidly curb the shortage.

Some measures have been taken, including a $52 million “Chips act” that was passed by the senate back in June, but it still hasn’t been cleared by the house, which the commerce secretary is urging them to do.

Automakers would also benefit from this act, since the reduced production they have to deal with will make them lose an estimated $210 billion in revenue due to 7.7 million fewer vehicles sold.

This delay in the adoption of the bill could also put the United States behind China and South Korea in terms of EV production, since these countries are currently heavily subsidising semiconductor production.


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