Chip Shortage Could Slow Transition to EVs

December 9, 2021 09:35:18

With extreme weather events ravaging different parts of the world, several countries have pledged to combat climate change by cutting their greenhouse gas emissions. Electric vehicles (“EVs”) are poised to play an integral role in reducing transportation emissions because they do not use fossil fuels, and they produce zero tailpipe emissions. Automakers, EV startups, and technology companies have invested billions of dollars in developing new electric vehicle models. However, the transition from internal combustion engine (“ICE”) cars to zero-emission vehicles could be held back by the worldwide chip shortage.

When the coronavirus first struck and left the world in a panic, most countries closed their borders and issued lockdown orders. Chipmakers reduced production or shut down their factories altogether, halting the manufacturing of computer chips for months. Even after automakers began production again and started placing orders for chips, supply was limited, partially because chip makers had turned their attention to consumer electronics in the interim. The resultant chip shortage sent shock waves across the auto industry, forcing car makers…

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