Categories
Component Shortage Electric Vehicles Electronic Components Semiconductor Supply Chain Technology

Chip shortage impact on electric car sales

Many renowned car companies have, by this point, tested the waters of the electric vehicle (EV) market. However, thanks to the roaring success of electric car sales last year, and governmental and environmental incentives, the EV market is about to shift up a gear.

Global shortage

The vehicle market was not able to avoid the semiconductor shortage that has been prolific for the past few years. Safety features, connectivity and a car’s onboard touchscreen all require chips to function.

This, combined with the work-from-home evolution kick-started by the pandemic, meant that car sales decreased, and manufacturers slowed down production. New car sales were down 15% year-on-year in 2020, and the chips freed up by this ended up being redirected to other profiting sectors.

Even without the demand from the automotive industry, it has not been plain sailing for chipmakers, who not only had to contend with factory closures due to COVID-19, but also several natural disasters and factory fires, and a heightened demand from other sectors. Needless to say, the industry is still catching up two years later.

The automaker market

Despite new car sales having an overall decline in 2020, EV sales had about 40% growth, and in 2021 there were 6.6 million electric cars sold. This was more than triple of their market share from two years previously, going from 2.5% of all car sales in 2019 to 9% last year.

Part of the reason why EV sales were able to continue was due to the use of power electronics in the vehicles. While there is a dramatic shortage of semiconductors and microelectronics (MCUs), the shortage has not affected the power electronics market to the same extent. That is not to say that an EV doesn’t need chips. On the contrary, a single car needs around 2,000 of them.

It begs the question, how many EVs could have been sold if there weren’t any manufacturing constraints. Larger companies with more buying power would have been able to continue business, albeit at an elevated cost, while smaller companies may have been unable to sustain production.

Bestsellers

The growth of the EV business in China is far ahead of any other region, with more EVs being sold there in 2021 than in the entire world in 2020. The US also had a huge increase in sales in 2021, doubling their market share to 4.5% and selling more than 500,000 EVs.

In Europe last year 17% of car sales in 2021 were electric with Norway, Sweden, the Netherlands and Germany being the top customers. Between them, China, the US and Europe account for 90% of EV sales

Predictions and incentives

Several governments have set targets to incentivise the purchase of electric cars, and to cut down on CO² emissions caused by traditional combustion engines. Many of these authorities have given themselves ambitiously little time to achieve this, too.

Biden announced last year that the US would be aiming for half of all car sales to be electric by 2030, and half a million new EV charging points would be installed alongside this. The EU commission was similarly bold, proposing that the CO² emission standard for new cars should be zero by 2035, a 55% drop from the levels in 2021.

Companies are also setting EV targets and investing in new electronic models. Some manufacturers are setting targets as high as 50% of their production being electric within the next decade, while others have allotted $35 billion in investment in their pursuit of EV sales.

Possible pitfalls

Aside from the obvious issues there have been with semiconductor production and sourcing, there are also other factors that may make the future of EVs uncertain. One of the essential components of an electric car is its battery, and the materials that are used are increasing in price.

Lithium, used in the production of lithium-ion EV batteries, appears to be in short supply, while nickel, graphite and cobalt prices are also creeping up. However, research is underway for potential replacements for these, which may help for both supply times and the associated costs.

The shortages are affecting everyone, but thankfully Cyclops is here to take some pressure off. No matter what electronic components you are looking for, the team at Cyclops are ready to help. Contact us today at sales@cyclops-electronics.com. Alternatively, you can use the rapid enquiry form on our website.

Categories
Component Shortage COVID-19 Electronic Components Future Semiconductor Supply Chain Technology

Latest electronic component factory openings

We’ve all heard about the shortages in standard components like semiconductors and chips. Cars, phones and computers, items we use every day, are no longer being produced at the speedy rate we’ve come to expect. The cause of this shortage is, in part, due to the COVID-19 pandemic.

This is especially noticeable in Europe and America, where production has often been outsourced to Asia in the past.

So who are the latest companies expanding operations, and how much are they spending? Check out our quick run-down of factories and when they should open:

Company: Intel

Location: Ohio, USA

Product: Chips

Completion date: 2025

Cost: $20 billion (£14.7 billion)

The latest, and possibly greatest, announcement on our list comes from Intel. The corporation revealed in January that they would be committing to building two chip manufacturing plants in New Albany, Ohio. The move is said to be due to supply chain issues with Intel’s manufacturers in Asia, and should boost the American industry with the creation of at least 3,000 jobs. Construction should begin this year.

Company: Samsung Electronics

Location: Texas, USA

Product: Semiconductors

Completion date: 2024

Cost: $17billion (£12.5billion)

The household name announced late last year that they would begin work on a new semiconductor-manufacturing plant in Taylor, Texas. The Korean company stated the project was Samsung’s largest single investment in America, and is due to be operational by the middle of 2024.

Company: Infineon

Location: Villach, Austria

Product: Chips

Completion date: 2021

Cost: 1.6 billion (£1.3 billion)

After being in construction since 2018, Infineon’s Austrian plant became operational in September last year. The chip factory for power electronics, also called energy-saving chips, on 300-millimeter tin wafers began shipping three months ahead of schedule in 2021, and its main customer base will be in the automotive industry.

Company: Northvolt

Location: Gdańsk, Poland

Product: Batteries

Completion date: 2022

Cost: $200 million (£148 million)

The Swedish battery manufacturer is expanding its operations with a new factory in Poland. While initial operations are supposed to begin this year producing 5 GWh of batteries, it hopes to further develop to produce 12 GWh in future. Northvolt has also just begun operations at its new battery factory in Skellefteå in Sweden.

Company: Vingroup

Location: Hà Tĩnh, Vietnam

Product: Batteries

Completion date: 2022

Cost: $174 million (£128 million)

The Vietnamese electric vehicle manufacturer is due to start production at its new factory later this year, where it will produce lithium batteries for its electric cars and buses. The factory will be designed to produce 10,000 battery packs per year initially, but in a second phase the manufacturer said it will upgrade to 1 million battery packs annually. VinFast, a member of Vingroup, is also planning on expanding operations to America and Germany.

Company: EMD Electronics

Location: Arizona, USA

Product: Gas and chemical delivery systems

Completion date: 2022

Cost: $28 million (£20.7 million)

The member of the multinational Merck Group is expanding operations with the construction of a new factory in Phoenix, Arizona, to manufacture equipment for its Delivery Systems & Services business. The factory is due to be operational by the end of the year, and will produce GASGUARD and CHEMGUARD systems for the company.

A bright future

These electronic component factory openings signal a great increase in business, and will aide in the easing of the component crisis. But it will take a while for these fabs to be operational.

Can’t wait? Cyclops is there for all your electronic component needs. We have 30 years of expertise, and can help you where other suppliers cannot. Whether it’s day-to-day or obsolete electronic components, contact us today at sales@cyclops-electronics.com, or use the rapid enquiry form on our website.

en_GBEnglish