Daimler CEO says chip shortage could drag into 2023

Europe

MUNICH — Soaring demand for semiconductors means the auto industry could struggle to source enough of them throughout next year and into 2023, though the shortage should be less severe by then, Daimler’s CEO said on Sunday.

Automakers, forced by the COVID-19 pandemic to shut down plants last year, face stiff competition from the sprawling consumer electronics industry for chip deliveries, which have been upended by a series of supply chain disruptions.

Cars have become increasingly dependent on chips — for everything from computer management of engines for better fuel economy to advanced driver assistance features such as emergency braking.

“Several chip suppliers have been referring to structural problems with demand,” Ola Kallenius told reporters during a roundtable event ahead of the Munich IAA car show. “This could influence 2022 and [the situation] may be more relaxed in 2023.”

The IAA Munich is the first major auto industry event in Europe since the pandemic.

Daimler said last week it expected significantly lower third-quarter sales at its Mercedes-Benz unit due to a global semiconductor shortage, becoming the latest in a string of automakers to take a hit to revenues.

Automakers from U.S.-based General Motors to India’s Mahindra & Mahindra and Japan’s Toyota have slashed output and sales forecasts due to scarce chip supplies, made worse by a COVID-19 resurgence in key Asian semiconductor production hubs.

Kallenius said on Sunday that despite the ongoing chip shortage, the German automaker hopes its own supply of semiconductors will improve in the fourth quarter.

As part of its plans to electrify its model range, Mercedes will show several full-electric vehicles at the show in Munich.

These will include global premiers for the EQE, the first full-electric model from the premium automaker’s high-performance AMG brand, and a concept car for its Mercedes-Maybach ultraluxury subbrand. The company will also introduce a full-electric SUV, the EQB, to the European market.

In July Daimler said it will spend more than 40 billion euros ($47.5 billion) by 2030 to take on Tesla in the all-electric market, but warned the shift in technology would lead to job cuts.

Outlining its strategy for an electric future, the German automaker said it will build eight battery plants as it ramps up electric vehicle production and from 2025 all new vehicle platforms will only underpin EVs.

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