Stellantis CEO sees chip supply crisis hitting carmakers ‘hard and strong’

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FILE PHOTO: The logo of Stellantis is seen on a company’s building in Velizy-Villacoublay near Paris, France, May 5, 2021. REUTERS/Gonzalo Fuentes

MILAN (Reuters) -A global crisis in microchip supply was hitting the automotive industry “hard and strong,” Stellantis CEO said on Wednesday, and carmakers would have to completely rethink semiconductor supply chains.

Carmakers across the world have had to curb output due to a shortage of chips used in everything from computer management of engines to driver assistance systems, which is hampering their recovery from the pandemic.

“The longer the chip crisis lasts, the harder it will be to sustain the auto industry’s current business model,” Stellantis boss Carlos Tavares told an FT web conference.

Stellantis, the world’s fourth largest car maker, last week said the chip shortage should improve in the second half of this year, but said the

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Put in park: How a tiny chip wounded the US auto industry

The global semiconductor chip shortage arguably is unlike anything the automotive industry has weathered. It is poised to drag on for months longer, cutting into the profits of automakers and their suppliers, delivering uncertainty and lost wages to autoworkers, and giving consumers fewer choices and higher prices on dealership lots.

The crisis — compounded by production issues tied to the coronavirus pandemic — could result in about 2.5 million fewer vehicles being built this year than planned and level a more than $61 billion hit to the industry, according to a forecast from global consulting firm AlixPartners.

At least 70,600 autoworkers have faced shutdowns and shift reductions at U.S. assembly plants represented by the United Auto Workers, according to the Ann Arbor-based Center for Automotive Research, part of more than 50 plants affected in North America by the shortage of chips used in everything from infotainment systems to power steering.

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White House convening summit with top executives on chip shortage


2 “Strong Buy” Penny Stocks That Could See 100% Gains (Or More)

In a recent review of the market’s current conditions, JPMorgan strategist Eduardo Lecubarri recaps his view that 2021 will see modest gains across stocks generally – but outperformance among the small/mid-cap sector. Lecubarri believes that investors can find opportunities for big upside among stocks in that class. Driving the general stocks gains, Lecubarri points to recent manufacturing PMI prints, which are at 15-year high levels, and the falling unemployment numbers – both data points indicate a firm foundation for economic recovery. With consumer confidence also rising, and relatively high savings, he sees a tailwind for the small/mid-cap as the year unfolds. A general trend of rising small-cap stocks should naturally impel analysts and investors to look at the ‘pennies,’ stocks that are priced below $5 per share. While not a sure indicator, low share price usually goes

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NIO Shuts Plant Because of Chip Shortage. It’s the Latest to Do So.

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NIO is halting production at a plant in China’s Hefei for five days.

Sean Gallup/Getty Images

The Chinese electric vehicle maker


is getting hit by the microchip shortage that is roiling the entire automotive industry. The company said Friday it was curtailing production because it just doesn’t have the parts.

The news is hitting the shares. NIO (ticker: NIO) stock is down 5% in early trading. The

S&P 500


Dow Jones Industrial Average,

for comparison, were both up about 0.4%.

NIO is temporarily suspending vehicle production at its JAC-NIO manufacturing plant in Hefei for five working days starting from Monday. JAC is NIO’s contract manufacturing partner.


General Motors

(GM) and

Ford Motor

(F) have unexpectedly halted plants because of the same issue.

The parts shortage creates an interesting situation for investors. NIO, and other EV makers, are valued like growth stocks, and the chip

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