Yesterday, Minister of Commerce Gina Raimondo said that the automaker’s grand plans for electric vehicles were jeopardized by the ongoing shortage of computer semiconductors.
“The average electric vehicle has about 2,000 chips, about twice the average number of chips in a non-electric car,” Raimondo said in prepared remarks to the Detroit Economic Club, a nonprofit group based in Michigan’s automotive hub.
“As companies like Ford and GM compete to get a foothold in the electric vehicle market, we know that innovations in the American battery market will be stifled if we don’t invest in domestic semiconductor innovations at the same time,” said Raimondo.
Prior to the speech, Raimondo also told reporters that Biden’s plans to have half of new vehicles electric by 2030 depend on the US investing in semiconductor manufacturing. “It’s necessary for our American economic competitiveness, it’s necessary if we are to meet our climate change goals, and it’s necessary to create jobs,” she told The Detroit News.
The US Secretary of State’s visit to Michigan was intended to mobilize support for a $ 52 billion bill to revitalize the US semiconductor industry.
The “Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act”, or “CHIPS for America Act” for short, was passed by the Senate in June as part of a larger bill, but has not received a vote in the House of Representatives.
The world’s semiconductors are mainly manufactured in Asia, especially China and Taiwan. As the pandemic lockdowns subsided and the economy came back to life, automakers were frustrated in their efforts to meet pent-up demand for cars. Semiconductor companies prioritized electronics companies, not automakers, because of their limited supply. As a result, almost every automaker has experienced chip-related slowdowns and downtimes.
The bottlenecks have already slowed down several high-profile electric vehicles.
In August, Ford Motor Co. announced to customers that a shortage of chips would delay shipments of its flagship Mustang Mach-E by several weeks, and General Motors Co. temporarily closed the Detroit facility that makes the Bolt EV. Also this summer, Rivian Automotive Inc., the electric truck maker, cited semiconductors as the reason for the delay, and production remains very slow.
A Commerce Department spokesman said the figure Raimondo cited – that an electric vehicle has twice as many chips as a conventional car – comes from discussions with automakers. “We think it’s a reasonable average,” said the spokesman.
A recent study by IDTechEx, a consultancy based in the United Kingdom, estimates that an electric vehicle needs more than twice as many semiconductors as its internal combustion engine, mainly because the electric vehicle needs far more power electronics.
An analyst said that Raimondo is right that electric vehicles need more semiconductors, but didn’t necessarily agree that electric vehicles are particularly prone to a shortage of them.
“EVs, especially those developed only on EV platforms, generally have more electronic content and therefore require more chips,” said Alan Baum, a Michigan-based automotive forecaster who studies electric vehicles.
He added, however, “EV design is important and … a cleaner approach like Tesla or even new platforms from GM, Ford and VW allow for greater performance and more efficient use of chips.”
Tesla Inc., the electric car maker, had fewer chip-related manufacturing issues. Baum said Tesla’s design required fewer chips because it “centralized computing power in a single place in the car, rather than distributing computing power across the various vehicle systems.”
Tesla’s competitors have taken action against chip shortages by integrating into the supply chain. Earlier this month, Ford signed an agreement with manufacturer GlobalFoundries to manufacture chips, and GM said it would be partnering with Qualcomm Inc. and NXP Semiconductors NV in a similar agreement.
Reprinted from E&E News with permission from POLITICO, LLC. Copyright 2021. E&E News provides important news for energy and environmental professionals.
