Ever wondered why your dream car is on backorder, or why new vehicles seem harder to find? The global chip shortage has left automakers scrambling for the tiny semiconductors that keep cars running, smart, and safe. This shortage affects everything from delivery dates to car prices.
In this article, we’ll break down when car manufacturers are likely to get the chips they need, what’s causing delays, and what it means for you as a driver or buyer.
When Will Car Manufacturers Get Chips? Understanding the Ongoing Chip Shortage
The Current Situation: When Will Car Manufacturers Get Chips?
Over the past several years, car manufacturers have faced a significant shortage of microchips—those tiny semiconductor components critical to building modern vehicles. As a driver, shopper, or auto enthusiast, you’ve probably noticed higher prices, longer wait times for new cars, and limited options at dealerships. The pressing question is: when will car manufacturers finally get the chips they need, and when will the shortage end?
The answer is nuanced. While the worst of the chip shortage appears to have passed, its ripple effects are still being felt. Industry experts project that, although supply is improving, automakers may not see a full return to “normal” chip availability until late 2024 or even 2025. Some models and manufacturers will recover sooner, while others may face ongoing disruptions.
Let’s break down what caused this shortage, how it’s being tackled, and what it means for you as a consumer or professional in the automotive world.
Why Did the Chip Shortage Happen?
The microchip shortage affecting car production didn’t happen overnight. It’s the result of several events and trends converging over the past few years:
1. Pandemic Disruptions
When COVID-19 hit, many automakers drastically reduced their chip orders, expecting a drop in car sales. At the same time, demand skyrocketed for consumer electronics—such as laptops, game consoles, and smartphones—as the world stayed home. Chip manufacturers shifted their capacity to supply these booming industries.
2. Complex Supply Chains
Automotive chips are highly specialized. They aren’t the same as chips used in phones or computers. Building them requires precise materials, machinery, and a tightly coordinated global supply chain. Disruptions—whether from natural disasters, political turmoil, or transportation bottlenecks—can halt production for weeks or even months.
3. Limited Production Capacity
There are only a handful of companies globally that can manufacture advanced semiconductors. It takes years and billions of dollars to build new chip foundries. When automakers tried to ramp up orders in mid-2020, the foundries were already booked solid by other industries.
4. Surging Car Tech Demand
Today’s cars use more chips than ever before. From touchscreens to advanced safety features, even a modestly priced vehicle can require hundreds or even thousands of semiconductors. This growing demand compounded the shortage.
How Is the Chip Shortage Impacting Car Manufacturing?
The effects of the chip shortage have been widespread and persistent, touching all corners of the automotive industry. Here’s what’s been happening:
Production Delays and Interruptions
- Automakers have been forced to pause production lines.
- Some manufacturers have prioritized high-profit vehicles—like trucks and SUVs—while delaying or skipping lower-margin models.
- Components shortages have led to unfinished cars sitting in factories, waiting for critical chips.
Fewer Cars, Higher Prices
- Reduced inventory means fewer cars on dealership lots.
- New car prices have reached record highs.
- Used car prices have soared as shoppers search for available transportation.
Changes in Car Features and Options
- Certain features—such as heated seats, touchscreens, or advanced safety tech—have been removed or delayed due to unavailable chips.
- Some manufacturers are delivering cars with “missing” features, promising to retrofit them later.
What Steps Are Car Manufacturers Taking to Solve the Chip Crisis?
Auto companies and their suppliers haven’t just sat back—they’re actively working on both short- and long-term solutions. These include:
1. Securing Chip Supply
- Automakers are negotiating directly with chipmakers rather than relying solely on intermediaries.
- Multi-year chip supply agreements are becoming the new norm.
2. Redesigning Vehicles and Electronics
- Some companies are adapting vehicle designs to use alternative, more readily available chips.
- Standardizing components to use fewer chip types can lessen dependency on hard-to-find parts.
3. Investing in Domestic Chip Production
- Major investments are flowing into building new semiconductor factories in North America and Europe.
- This reduces reliance on overseas suppliers and can help stabilize the future chip supply.
4. Increasing Inventory Buffers
- Many automakers are changing their “just-in-time” inventory strategies by keeping higher stocks of critical parts.
- This approach adds cost, but it helps cushion against future disruptions.
When Will the Chip Shortage End for Automakers?
Practical Timeline
The industry’s consensus is cautiously optimistic:
- 2024: Many analysts believe that, by the end of 2024, supplies of standard automotive chips will stabilize for most brands and models. You’ll notice improved car availability at dealerships, though lingering shortages may persist for high-tech or less-common vehicles.
- 2025 and Beyond: Full normalization, especially for the most advanced chips and high-end vehicles, may not occur until 2025. This is partly because new chip factories take time to start up and reach full output.
It’s worth noting that if global events—like geopolitical tensions, new pandemics, or supply chain hiccups—occur, this recovery could be delayed.
What Does This Mean For You?
Whether you’re planning to buy a new car, sell your old vehicle, or just keep up to date, here’s how the chip shortage may affect your experience:
If You’re Buying a New Car
- Expect high prices to persist through much of 2024.
- Popular models, especially hybrids and EVs, may have longer wait times.
- Limited inventory means you should shop early, be flexible about your choices, and consider factory orders.
If You’re Shopping for a Used Car
- Used car prices remain elevated because of low new car availability.
- Late-model used cars could cost nearly as much as new ones.
- Consider expanding your search to include certified pre-owned (CPO) programs or different brands.
If You’re Waiting on a Backordered Vehicle
- Communicate regularly with your dealer about updates.
- Be aware that some features promised at order may be missing or delayed.
- Some automakers offer incentives or discounts for vehicles missing non-critical features.
If You’re Simply Curious
- Watch for news from automakers about their chip recovery plans.
- Expect to see more “retrofit” programs, where missing tech features can be installed later.
Practical Tips: Navigating Car Purchases During the Chip Shortage
1. Stay Flexible
- Widen your search to include different manufacturers or models.
- Don’t fixate on a specific color or optional feature; flexibility is key to finding something in stock.
2. Act Quickly
- If you find a car you like, move fast—high-demand models don’t stay on lots for long.
3. Consider Pre-Ordering
- Many dealerships allow you to custom order a car; while wait times can vary, this helps ensure you get what you want.
4. Negotiate Carefully
- Some dealerships may be less willing to bargain due to low inventory.
- Look for manufacturer incentives or dealer add-ons, but expect less than pre-pandemic times.
5. Stay Informed About Features
- Ask if any features are “pending” installation due to chip shortages and request written documentation.
- Find out if dealers offer free retrofits or discounts for missing features.
The Road Ahead: How the Chip Crisis Is Reshaping the Industry
The microchip shortage has fundamentally changed how automakers think about the supply chain. Expect several long-term shifts:
- More investment in local (domestic or regional) chip manufacturing to reduce vulnerability to global bottlenecks.
- Increased collaboration between car companies and semiconductor suppliers.
- Car models may become more “modular,” making it easier to swap in chips or components as needed.
This crisis, while tough, is driving innovation and new resilience in the automotive sector. In the long run, the industry may emerge stronger and better prepared for future disruptions.
Frequently Asked Questions (FAQs)
How long will the chip shortage last for car manufacturers?
Experts predict the automotive chip shortage will continue to some extent through late 2024, with full recovery for all brands and models likely by 2025. Lower-demand or less complex vehicles may recover sooner, while high-tech models could take longer.
Why did car manufacturers run out of chips in the first place?
The shortage happened because carmakers initially cut chip orders during the pandemic, believing car sales would drop. Meanwhile, demand for consumer electronics surged, and chip factories shifted focus. Restarting automotive chip supply takes time because of production complexity and supply chain delays.
Are all cars affected, or just some brands and models?
Nearly all automakers have been affected, but the impact varies. High-demand models, electric vehicles, and those with advanced tech have seen the most significant delays or feature removals. Some brands—especially those with close ties to chip suppliers—have fared better than others.
Will new cars be missing features due to the chip shortage?
Yes, in some cases. Some automakers have shipped cars without features like heated seats, touchscreens, or advanced safety options, promising to retrofit them later. Always check with your dealer about which features are included and when (or if) missing options will be installed.
Is it a good time to buy a car, or should I wait until the shortage ends?
If you need a car now, act quickly and be flexible. Prices are high and selection is limited, but availability is slowly improving. If you aren’t in a rush, waiting until late 2024 or 2025 could mean better prices, more choices, and the return of missing features.
In Summary
The chip shortage has been a major roadblock for car manufacturers and shoppers alike. Relief is underway, but patience is still required. By staying up-to-date, flexible, and well-informed, you can navigate the market and even benefit from the industry’s renewal.
Whether you’re buying, selling, or just watching from the sidelines, understanding the chip shortage can help you make the best choices in a quickly changing automotive world.
