The global semiconductor shortage has been much reported on, but few of the major auto companies are able to provide a clear estimate for how much it will affect their manufacturing production in the second half of the year.
First and foremost, the Chinese EV makers, namely Nio, Li Auto, and Xpeng seem to be unaffected by the chip shortage this year. However, these companies have such small scale compared to traditional automakers that it's much easier for them to stockpile chips.
- In July 2021, Nio delivered 7931 vehicles, up 124% year over year.
- Li Auto delivered 8589 vehicles, up 251% year over year.
- Xpeng delivered 8054 vehicles, up 228% year over year.
It's likely that these three companies won't face the kind of manufacturing constraints that major automakers are experiencing from the chip shortage, but it will be essential to listen to comments from the respective firm's executives in their upcoming Q2 conference calls.
Larger automakers however are already feeling the pressure. In Q2 2021, Tesla delivered 206K vehicles, up 151% year over year, but during the firm's earnings conference call, Elon Musk made the following two comments:
"We have had some factory shutdowns due to part shortages, and we hope those will be relieved in the coming weeks and months."
&
"The global chip shortage remains quite serious. For the rest of this year, our growth rates will be determined by the slowest part in our supply chain, which is there's a wide range of chips that are, at various times, the slowest parts in the supply chain."
Thus without the chip shortage, based off of Mr. Musk's comments, it's likely that the firm could've delivered even more vehicles in the second quarter.
However, it seems other automakers are hurting even more than Tesla. As reported in the Wall Street Journal yesterday, Stellantis, the merged conglomerate of Chrysler, Jeep, Maserati, Citroen, Fiat, and 14 other brands, reported in its semi-annual report that it cut production by 20% in the first half of the year due to the chip shortage and could possibly face a similar production restriction for the second half of the year.
To the contrary, Mercedes (Daimler) & BMW, both reported solid growth in sales in the first half of 2021, with respective year over year growth for their marquee brands of 21% and 39%. Both firms admitted that the semiconductor shortage was affecting their production to an undisclosed degree. Daimler doesn't disclose exact sales for China, but BMW stated that it's China sales (which are slightly distorted by inclusion of Mini & Rolls Royce) increased by 42%.
With regards to their guidance for the second half of the year, Mercedes stated that they expected increases in delivery volumes across all major global markets. BMW also stated that they "expect solid increase in the number of BMW, Mini, and Rolls Royce vehicles delivered to customers."
However both firm's guidance included caveats such as "But, as the supply bottlenecks drag on, the situation is becoming more volatile. That is why we anticipate further disruption to production in the second half of the year and a related impact on vehicle sales (BMW)". & "We also recognize that the visibility of how the supply situation will actually develop is currently low" (Daimler).
Given the lack of any concrete estimates from Tesla, BMW, & Daimler, it's difficult to project what the exact impact on sales could be for the aforementioned companies. However, given their different market segments, Stellantis's guidance is informative as a rough estimate.
As stated, the Chinese EV makers are most likely too small to be influenced by the EV shortage.
One possible explanation for how the chip shortage is playing out between major automakers requires one to consider that BMW, Daimler, and Tesla produce cars at luxury price points, whereas Stellantis is producing a high volume of lower priced models from Fiat, Citroen, and other mass market brands. As global supplies of chips tighten, Tesla, BMW, and Daimler are probably willing to pay more for their chips because their cars are much more expensive than those produced by Stellantis, so every model not produced is a comparatively larger hit to their revenues. Given the slim net margin of Stellantis (7.9% in 1H 2021) versus 16.7% for BMW in the same period, BMW and other luxury automakers most likely have a much higher willingness to pay for chips than Stellantis, which may have calculated that certain chips were too expensive to put in its cheapest models.
If this explanation holds true, on a speculative level it could strangely lead to higher margins and net profits for the luxury auto makers like BMW & Daimler for the rest of the year as they use the chips they can ascertain amid the shortage to only produce their most expensive models, dragging up the average sales price. Given the current opacity and lack of statistics about the chip shortage though, it's difficult to make all but the most general of predictions. Whether the chip shortage will drag into 2022, resolve itself by the end of 2021, or even become worse will only become apparent with more time.
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