China’s automotive-chip shortage could persist for as long as a decade, but it has little to do with the current supply glitches snarling production, according to the official who oversees the nation’s key new energy vehicle technology development platform. Short-term factors like mistakes in ordering due to incorrect forecasts and factory disruptions because of Covid-19 will resolve naturally, Yuan Chengyin, general manager of the National New Energy Vehicle Technology Innovation Center, said. Rather, China’s rising demand for electric cars, its lack of domestic technical knowhow and sustained geopolitical tensions will emerge as much more serious issues.
Carmakers around the world have been hit in recent weeks by a worsening global semiconductor shortage that’s led to production cuts and staff layoffs. A deputy secretary general of the China Association of Automobile Manufacturers said last week that the chip shortages could’ve had a relatively big impact on China’s car industry from late December and may persist into the second quarter.
China is the world’s biggest automotive market, with wholesale deliveries totaling 25.3 million units in 2020. Vehicle sales are expected to increase this year for the first time since 2017, reaching about 27.2 million units. Demand for EVs offered by the likes of Tesla Inc. and Nio Inc. should help drive the growth.