In September, global consulting firm AlixPartners in Southfield said the chip shortages could cost the global auto industry $210 billion in revenue for the year

begin partial quote from:

https://www.freep.com/story/money/cars/2021/06/15/car-chip-shortage-2021/7688773002/ 

WHY IS THERE SO MUCH COMPETITION FOR CHIPS?

In September, global consulting firm AlixPartners in Southfield said the chip shortages could cost the global auto industry $210 billion in revenue for the year.

GM CEO Mary Barra has said the shortage could cost GM up to $2 billion in lost earnings this year. Barra said GM expected chip supplies to return to normal in the second half of the year.

The Alliance for Auto Innovation, the trade group that represents automakers, said the shortage could hurt auto production for another six months and result in 1.28 million fewer vehicles being made in the U.S. this year.

So it is critical for automakers to get as many chips as possible to keep assembly lines moving to mitigate losses.

More:Bad quarter and year as auto industry to lose billions from chip deficit

It remains unclear whether automakers might be able to make up that production and any revenue losses over time, Krebs said.

"The losses are being offset by higher vehicle prices and less expense," Krebs said. "Almost every automaker in every region has been forced to make production cuts. As a result, inventories are extremely low while consumer demand is extremely high. That means vehicle prices are high."

In the first week of June, the average listing price of a new vehicle was $40,566, up nearly $200 from the prior week. The average listing price was 5.5% above last year, and 10.3% above the same week in 2019, Krebs said.

Used car prices are also high because with new cars not moving, trade-ins aren't happening creating a shortage ofused cars. too. The average listing price for a used vehicle was $23,786, up nearly $340 from the prior week, Krebs said. Prices are running 22% above 2020 and 2019 levels, she said.