Stellantis CEO Carlos Tavares says chip shortage will drag into 2022


The global chip shortage comes as demand for cars has spiked during the global economy’s recovery from the coronavirus crisis, driving up prices of new and used vehicles.

Some automakers have adapted to the chip shortage by dropping features from their models, while others have built vehicles without the necessary chips and then parked them until their assembly can be finished later.

Stellantis is making decisions around changing the diversity of chips it intends to use, he said, adding the visibility around chips is not great. It takes roughly 18 months to re-engineer a vehicle to use a different chip because of the sophistication of the technology involved, he said.

Tavares said Stellantis will continue to prioritize its highest-profit models with the chips it is receiving, echoing an approach taken by rivals.

Earlier on Wednesday, Daimler said the chip shortage would dent car sales in the second half of 2021 and extend into 2022. However, Daimler CFO Harald Wilhelm said the shortage would be less severe next year.

Last week, Sweden’s Autoliv, the world’s largest maker of airbags and seat belts, also said the shortage could linger into 2022.

Tavares also said on Wednesday Stellantis could, if needed, boost planned spending on electrification beyond the more than 30 billion euros through 2025 it previously outlined. He added it also could raise the number of battery plants it plans to build beyond five, or raise those plants’ planned capacity.

Stellantis will build three of the battery plants in Europe and two in North America, Tavares said. At least one of the North American plants will be in the United States and those sites will be announced before year-end.

Tavares said he sees public acceptance of electric vehicles accelerating as concerns about climate change rise with events like the flooding in Europe.

He also said Stellantis was ahead on plans to achieve 5 billion euros ($5.89 billion) in annual cost savings from the January merger of Italian-American automaker Fiat Chrysler and France’s PSA.