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As Electric Car Sales Grow, the Chip Shortage Hits Market Hard

Electric car sales increased dramatically last year, although the sector as a whole did not recover from the Covid epidemic.

According to the Society of Motor Manufacturers and Traders, more electric cars were registered in 2021 than in the previous five years combined (SMMT).

However, the industry group stated that considerably more investment in charging infrastructure is required.

Meanwhile, a severe lack of computer chips has made it difficult for dealers to get many new conventional models.

Overall, the automotive sector had another bad year in 2021. According to preliminary estimates from the SMMT, 1.65 million new automobiles were registered.

This was a little improvement over 2020, when the first Covid-related lockdowns and dealer closures caused sales to drop.

However, it was the second-worst figure in over three decades, and it was down 28% from pre-pandemic levels.

A new lockdown was imposed at the start of the year, and any expectations of a long-term recovery were shattered by a serious shortage of semiconductors, or computer chips.

Engine management and emissions control, emergency braking, airbags, entertainment systems, and navigation are all areas where they are employed in modern automobiles.

Between 1,500 to 3,000 semiconductors can be found in a contemporary vehicle.

However, Covid-19 outbreaks in the locations where the chips are produced, mainly in Southeast Asia, resulted in factory closures, limiting supplies.

The automotive industry was also up against stiff competition for available chips from other industries, especially the consumer electronics industry.

As a result, automakers were driven to dedicate limited resources to the most profitable models as well as those that helped them reach emissions limits, such as electric and plug-in hybrid vehicles.

Despite the market’s issues, electric car registrations increased by more than 75 percent, from 108,000 in 2020 to 191,000 last year.

They sold one out of every four automobiles in December, while Tesla’s electric Model 3 was the country’s second-best-selling car for the year.

This trend will be welcomed by the government, which aims to phase out new petrol and diesel automobiles by 2030 in order to satisfy climate change pledges.

The SMMT, on the other hand, has warned that lowering the amount of the plug-in car incentive might send conflicting signals to customers.

The maximum value of the subsidy, which is intended to decrease the cost of an electric car, was reduced from £2,500 to £1,500 in December, and the number of models eligible was also reduced.

“It’s a muddled message,” said Mike Hawes, the SMMT’s chief executive.

“It’s a huge goal to bring the entire market to net zero emissions by 2030/2035. We believe you should use every tool at your disposal.”

Mr Hawes stated, “There will be more individuals fighting for a lot more slowly rising number of on-street chargers.”

“We want the user experience to be smooth, inexpensive, and simple. And we believe that this will be one of the impediments to consumer adoption of the cars that we require across the country.”

However, Melanie Shufflebotham, co-founder of the Zap Map website, which identifies charging stations around the country, disagrees that new infrastructure is being implemented too slowly.

She stated, “Electric automobiles are already the standard.”

“Throughout 2021, both sales and public charging infrastructure accelerated. In the UK, there are approximately 30,000 public charging, up by more than a third since the end of 2020.”

“However, we do need charging to keep rising at a rapid pace this year to ensure that the next generation of EV drivers has a straightforward experience.”

Bob Carlson
Bob Carlson
Bob Carlson is a business journalist, with over a decade of experience in the trenches of reporting up-to-date business news for publications all over the world. With a wealth of knowledge at his back, Bob strives to bring the most important insights into the business world for TheOptic daily.
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