Growing demand for electric vehicles worldwide led to an increase in demand for computer chips. The shortage led many automakers to shut their production for weeks at a stretch. To avoid future supply interruptions and the country’s dependence on China for parts, Gina Raimondo, Commerce Secretary of U.S. urged the House of Representatives to immediately pass the pending Chip Act.
The bill was passed in the Senate in June this year and is yet to be passed from the House. The Chip Act would authorize $52 billion in subsidiary for domestic semiconductor manufacturers and researchers. This Act will help the chip manufacturers to build the factories as it is expensive and time-consuming.
According to AlixPartners, the global auto industry will produce 7.7 million fewer vehicles this year, costing $210 billion in revenue because of chip scarcity.
The Biden administration aims to sell zero-emission vehicles like electric, plug-in hybrid, and fuel cell electric vehicles in 2030 to behalf of all the new vehicles sold.
As reported in CNBC, Gina said as the automotive industry starts producing more electric vehicles, there is a need for an increase in domestic chip production as the average EVs use 2000 chips which are roughly double that of a non EV. Gina added that Biden’s aim is an “excellent goal” but the “truth of the matter is that requires a lot of chips.”
