If we learn nothing else from this pandemic, let it be that supply chains are a powerful force in the country. With limited workers and factory capacity, we have seen so many delays and shortages in things we normally take for granted. Take the Ford Bronco or the rush for the Playstation 5, for instance. But now, it’s stretching into other markets like delaying production on the 2021 Toyota Tundra, as well as others.
How is the Playstation 5 connected to the 2021 Toyota Tundra?
Automakers attempted to keep things moving through 2020, but the supply chains suffered from the necessary six-week shutdown that had lasting effects on the automotive industry. According to Car and Driver, we are now facing a micro-chip shortage that puts the brakes on car production yet again.
This is where the Playstation 5 comes into play. To be fair, it’s not just the lusted after PS5 that’s to blame. Consumer electronics are everywhere these days, but people rely more and more on these gadgets in Corona times. People are replacing computers, phones, TV, and video game consoles like crazy these days. All of that electronic consumption is what brings us to a supply/demand curve that favors demand.
Cars and trucks (even the Tundra) have become reliant on semi-conductors
Yep. Even the old dinosaurs these days have microchips to run the various computers and cameras and whatnot. The semiconductors make the microchips work and that, my friends, is where the supply chain is lacking. I still can’t believe the Toyota Tundra has anything resembling a microchip in it.
Car and Driver Interviewed Gaurav Gupta, the vice president analyst at consulting firm Gartner and he said it like this, “Semiconductors are becoming much more important across the entire value chain for a vehicle, and such is the case in more expensive vehicles with more technology, but in particular for electric vehicles.”
The alarm went out from Continental and Bosch as early as last December that the semiconductor supply chain was under immense stress that could lead to a log jam. Not only are the video games, computers, cell phones, TVs, and everything else using these parts, but with the increased production of EVs, the strain from the automotive sector is really not helping.
How many semiconductors can a car even have?
Chris Richard, a principal at Deloitte Consulting who works in the semiconductor segment, says, “Some of these modern vehicles have thousands of semiconductors . . . and some of these things are probably a nickel apiece, and some are probably $150.” He goes on to say that the price of the part is almost irrelevant to production times. Regardless of which piece is needed, missing one will slow or even pause production.
Toyota isn’t the only manufacturer hurting for chips
Nope. The Toyota line is backed up, but so is Subaru, Ford, FCA, VW, Nissan, and Honda. It turns out these little parts are quite important. I know it’s hard to believe, but the Tundra got hurt the most in the supply chain break for Toyota. For something so clumsy and outdated, you’da thought Toyota could build the Tundra out of some old cinderblocks and a hot glue gun they had laying around. Apparently, that is not the case.
Many of these marques are scrambling to alter the production process to keep things moving while they wait. Much like the pandemic shift to making ventilators, these factories are quite impressive and adaptive.
That being said, I feel the automotive industry will feel the pandemic for quite a long time to come.