‘Not enough raw materials to create what you need and want’: Shortage of microchips in the motor industry

By Ciara Tyrrell

TheCity.ie spoke to car salesman Stuart Davidson about what is going on in the motor industry. 

Davidson is a trained mechanic and has been selling cars for the last 30 years and here is what he has noticed- from the lack of supply in car parts to the effect Covid-19 has had on the motor industry.

When asked about the shortage of microchips for motorised vehicles, Mr. Davidson said “the fact is that this has been coming a long, long time long before covid, long before the chip shortage.”

Basically, as time has been moving on between gaming machines, phones cars, e.v’s (electric vehicles) have all been using “the same chips. So, therefore, they weren’t producing enough, and then the perfect storm came along where covid hit, production stopped the whole supply chain stopped” and when the motor trade tried to “cranked back up again to do the manufacturing” and get all the chips, the plastic, and all the raw materials- “it wasn’t there. So it’s caused a major backlog in the production system.”

So to put what is happening in the motor industry simply “there is just not enough raw materials to create what you need and want.” said Mr. Davidson.

Microchips are not the only problem as to why cars are not being produced “it’s not just the microchips, it’s the whole supply chain of the world” because we are now “moving so fast and so quickly into the EV world.”

The other problem with the microchips is that they are essentially running on windows 7 but the “motor trade’ was told to go to windows 10 and said no we’re grand. So they were buying the Windows 7 chips for little to no money and what happened was the people that build the chips went well. We are not building them anymore.” which has also factored into the lack of microchips for car manufacturing.

In terms of how long it will take for the cars to upgrade to Windows 10, it will probably take “2 to 3 years” in Davidsons opinion.

This has impacted the production of cars immensely, according to Davidson there are some manufacturers for Ireland alone that “cannot supply a car until next July. January, February, March is when we do 60-80% of our business and the rest of the year is needed and wanted- so we should now be preparing for January, have all our cars ready to go- but we don’t have any.”

Usually, at this time of year Davidson’s showroom would be full as well as the yard and they would have “a surplus ready to go for January” but three weeks ago “we had one car” that was a 2021 model and it “looked like we liquidated”. 

“We are down 40 used cars. So everything has slowed down and on top of that you have Brexit- they are in a worse place than where we are. It was just a perfect storm.”

Something which Davidson has never experienced over the last 30 years is the price of used cars rising- “in the motor trade used cars are now starting to creep up which is something that never happened. Depreciation stopped, normally cars go down in value in Ireland.They never go up. Now there are cars that are actually climbing back up in certain vehicles like 7 seater vehicles”.

When it comes to electric vehicles (E.V’s) the problem starts to unravel even more. Davidson uses the example of a petrol car versus its electric counterpart to paint the picture.

Say you are buying a Peutgeot 208 the “electric is about 28 grand, it’s petrol version is 5-6 grand” so “why would I buy an electric car? Davidson asks. “When you run an electric car over a period of three years as suppose to a petrol car there is an on average 10 euro per month differential. So where’s the benefit?”

“If your electric battery goes, I have nowhere to recycle it. There is no way to recycle an EV battery but don’t talk about that big secret.” also the reevaluation in an EV car is horrendous “you spend say 30 grand on an EV and your twin sister spends 24 grand on a petrol, in three years time they are worth the same. And if you live in an apartment block and you are a tenant. How can they buy an electric car?”

“The argument is I can charge it on the road” at a charging station “but say I beat you to the charger, and I need 7 hours to charge my car. So if I get there at 10 o’clock, I’m not getting up at 4 o’clock for you” to charge your car”. Sadly the “infrastructure is not there”. 

Davidson does acknowledge that electric cars are the way forward “it is technology, they are fabulous cars to drive, but they are too expensive for Joe Bloggs. They cannot afford the car.” 

EV cars to put it simply “are just too dear”

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