Commerce chief: Need chips for e-car deadline

DETROIT — The United States won’t meet the Biden administration’s goal of widespread electric-vehicle adoption without urgent investment in domestic semiconductor manufacturing, Commerce Secretary Gina Raimondo said.

Demand for computer chips is already far outstripping supply, a problem that will intensify with widespread adoption of electric cars, which require more chips per vehicle than traditional vehicles, Raimondo told journalists before meeting with automakers and delivering a speech about the chip shortage Monday in Detroit.

She urged Congress to pass the Chips Act, which would authorize $52 billion in subsidies for domestic semiconductor manufacturing and research.

The Senate passed the bill in June, but the House has not yet cleared it.

The Biden administration is aiming to make half of all new vehicles sold in 2030 zero-emissions vehicles, including electric, plug-in hybrid or fuel cell electric vehicles.

“We will not hit those goals if Congress does not quickly pass the Chips Act,” Raimondo said.

“We are wasting time, precious time, every day that the Chips Act isn’t passed and appropriated in Congress.”

“Probably the car you drive now has hundreds of chips. The [electric vehicle] that we want you to buy over time has two thousand chips,” Raimondo said in her speech to the Detroit Economic Club.

Other countries have subsidized semiconductor manufacturing for years and the U.S. must, too, she added.

A global shortage of semiconductors has hobbled the auto industry for the past year, forcing many automakers to suspend production for weeks at a time.

Demand for the components is soaring as more consumer goods become computerized and as Americans ramp up spending on electronics of all kinds.

But chip supply is scarce because semiconductor factories are extremely expensive and time consuming to build.

The costs to automakers have been huge: The global auto industry will produce 7.7 million fewer vehicles this year because of the chip shortage, costing it $210 billion in revenue, according to the consulting firm Alix-Partners.

Auto workers have also suffered, with thousands furloughed from their jobs during factory shutdowns, Raimondo said during a roundtable discussion with big car companies and the United Auto Workers on the outskirts of Detroit.

Auto executives at the roundtable expressed frustration about the intractability of the shortages.

“Are we seeing any improvements? The short answer is no. It’s still very hand to mouth,” said Ray Scott, chief executive of Lear Corp., an auto parts supplier.

Jonathan Jennings, Ford Motor Co.’s vice president of global commodity purchasing, called the roundtable discussion a “good step forward.”

He called the Chips Act a promising fix for longterm supply problems, but stressed that the industry needs more semiconductors now.