The Chip Shortage is WAY WORSE | Here's What They AREN'T Telling You

TL;DR

The automotive industry is facing the impact of the chip shortage, with nearly 300,000 vehicles removed from production. Ford has also postponed the deadline for dealers to decide on investing in EVs.

Transcript

well it's noon here in Bethesda Maryland at 9 A.M in Southern California and this is news that you can use from yaa with your host Zach and Ray and well apparently Zach is having a bad hair day that hair day indeed pops how are you doing happy Monday uh I am well I think I might be a little bit better than you because if it were me I would have sch... Read More

Key Insights

• 🚙 The chip shortage is impacting the automotive industry, leading to the removal of 300,000 vehicles from production.
• 🎛️ Ford's EV deadline extension indicates that dealers are hesitant to invest in EVs due to cost and control limitations.
• 🚙 Automakers may be intentionally restricting vehicle production to control inventory and maintain higher profit margins.

Questions & Answers

Q: Is the chip shortage causing the removal of 300,000 vehicles from production?

There are doubts about whether the chip shortage is the actual reason for the vehicle production decline. Some believe it is an excuse to reduce inventory levels, as sales have slowed down and dealerships have more on-hand inventory.

Q: Why would automakers intentionally restrict inventory levels?

By restricting inventory, automakers can maintain higher profit margins and limit the need for incentives. They can also focus on selling higher-profit margin vehicles and control inventory levels at dealerships.

Q: Are dealers hesitant to invest in EVs according to Ford's latest deadline postponement?

Yes, Ford's decision to extend the deadline suggests that dealers are reluctant to invest in EVs. The million-dollar investment required and the control over pricing and sales by Ford could be factors that discourage dealers from participating.

Q: How are chip shortages and reduced demand connected?

While some automakers claim a chip shortage, chip manufacturers have reported reduced demand. It raises questions about whether the shortage is genuine or an excuse to control inventory levels and maintain profitability.

Key Insights:

• The chip shortage is impacting the automotive industry, leading to the removal of 300,000 vehicles from production.
• Ford's EV deadline extension indicates that dealers are hesitant to invest in EVs due to cost and control limitations.
• Automakers may be intentionally restricting vehicle production to control inventory and maintain higher profit margins. -Prominent automakers are transitioning towards a new dealership model, focused on controlling inventory levels and reducing incentives.
• The chip shortage and reduced demand are intertwined, leading to questions about the authenticity of the shortage and its impact on production.
• Vehicle sitting on lots for extended periods can lead to issues such as rodent infestation and internal damage.
• Ford's decision to extend the deadline may result from pushback and resistance from dealerships, particularly in Pennsylvania.
• The transition towards EVs and new dealership models requires careful consideration of costs, warranty exposure, and dealer autonomy.
• It remains uncertain whether automakers will consider alternative options for vehicles sitting on lots, such as scrapping or certifying them as used cars.

Summary & Key Takeaways

• The chip shortage continues to affect the automotive industry, with approximately 300,000 vehicles being removed from production. However, there are doubts about whether this shortage is genuine or used as an excuse to reduce inventory levels.

• Ford has extended the deadline for dealers to decide on investing in EVs. This move may indicate that fewer dealers are willing to make the million-dollar investment required by Ford to sell EVs.