General Motors facing US$2 billion loss due to semiconductor shortage

The Detroit-based automotive conglomerate made the grim predictions during an offical statement, following the release of its fourth quarter 2020 earnings report.

CEO Mary Barra (shown below with US President Joe Biden) said production of full-size SUVs and pickups would be largely unaffected by the developments, however noted the impact on passenger vehicles could be more severe.

It wasn’t all bad news, however – the company reported before-tax profits of US$2.8 billion (AU$3.7 billion) for the final three months of last year, up from a loss of US$194 million (AU$251 million) a year prior due to disruptions caused by the 2019 United Auto Workers Union strike.

Last week, General Motors hometown-rival Ford was similarly forced to pause production of its highly-profitable F-150 pickup, citing the same chip shortage concerns.

Drive understands the ongoing crisis was caused by supply chain collapses that came about during the height of the coronavirus pandemic.

However, the increased uptake of electrified cars has also put a strain on stockpiles – the average internal combustion car today uses between 50 to 200 individual chips, while hybrid and EVs can employ upwards 3500.