[Asia Economy Reporter Hyunwoo Lee] Global consulting firm AlixPartners has analyzed that the global automotive industry will not be able to escape the impact of semiconductor supply shortages at least until 2024. In particular, concerns are rising that the situation where supply cannot catch up with demand may persist for a long time as the production of electric vehicles, which use a large number of semiconductors, increases.
According to the Associated Press on the 27th (local time), AlixPartners stated in a report released that day, "The earliest time for automobile production to reach pre-COVID-19 pandemic levels will be after 2024," and pointed out, "As electric vehicle production, which uses more than ten times the semiconductors compared to internal combustion engine vehicles, rapidly increases, the semiconductor shortage will worsen."
In particular, the increase in electric vehicle production due to the European Union (EU)'s eco-friendly policies is expected to exacerbate the semiconductor shortage. The EU plans to ban the sale of all new vehicles equipped with internal combustion engines starting in 2035. If the plan proceeds as scheduled, it is expected that 83% of all vehicles sold in Europe will be electric vehicles. However, AlixPartners analyzed that the share of electric vehicles in global vehicle sales in 2035 will still be around 50% due to issues such as the establishment of related infrastructure like charging facilities.
AlixPartners also forecasted, "This year, global automobile market sales, combining passenger cars and light commercial vehicles (LCVs), will slightly decrease to 78.9 million units compared to the previous year's record of 80.3 million units." This is an analysis that vehicle production will be difficult to increase until the semiconductor shortage is resolved.
Additionally, although automobile prices are currently at higher than usual levels, they are expected to show a downward trend by 2024 at the latest. Since 2020, the prices of raw materials required for the production of internal combustion engine vehicles and electric vehicles have doubled and tripled respectively, causing automobile prices to rise. However, considering the consumption slowdown due to inflation, it is analyzed that automobile companies will have no choice but to offer discounts. Fabian Piontek, director at AlixPartners, explained, "It is already anticipated that high inflation will affect consumer behavior."
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