Shulou(Shulou.com)11/24 Report--

Singapore science and technology media govtech recently wrote an analysis that with the passage of the Chip and Science Act, hundreds of idle cars across the state may eventually find their lost jigsaw puzzle.

The US president officially signed the $280 billion Chip and Science Act on Tuesday, which stipulates that $52.7 billion will be devoted to semiconductor research, development, manufacturing and labor development, including $2 billion for traditional mature process chips, which are key to cars and defense systems, a proposal advocated by Democratic Senators Gary Peters and Debbie Stabenow of Michigan.

Semiconductor investment and the current US government's efforts to promote the electrification of the automobile industry complement each other.

Speaking in the Rose Garden, the President of the United States began by saying: "Detroit is building some very hot cars." According to the report of the Semiconductor Industry Association in 2021, cars account for only a small part of the global semiconductor demand, and it is estimated that automotive chips account for only 11% of the entire chip market.

However, the future of the automotive industry depends heavily on the supply of chips, as more and more technologies are used in cars, and the manufacturing focus is gradually shifting to electric and self-driving cars.

The president of the United States said in his speech that electric vehicles use an average of about 3000 chips, which means that electric vehicles will need more than twice as many chips as non-electric vehicles.

Auto Forecast Solutions, an analyst, said the global car production cut was due to a shortage of chips and raised its estimate of vehicle losses caused by the chip shortage to 3.3 million.

Although the shortage remains, sales of electric vehicles hit an all-time high in the second quarter of 2022. Nearly 200000 electric vehicles have been sold, an increase of 66 per cent over last year, according to Cox Automotive.

The electric car market can continue to produce, while traditional internal combustion engine vehicles (ICE) are stagnant. Forecasts for July show a 12% drop in ICE sales, according to Cox.

Michelle Krebs, executive analyst at Cox, said part of the reason is that automakers are giving priority to chips for high-end vehicles, such as trucks, SUV,EV and other luxury cars, to improve their return on investment.

"it is these buyers who have made a high demand for these vehicles, and many other users have withdrawn from the market," she said. "

In addition to the high demand for electric cars, the high price of gasoline is also prohibitive. The average price of gasoline in Michigan rose to $4.82 in July.

"whenever the price of gasoline goes up, we see an increase in demand for electric vehicles," Krebs said. "when oil prices go down, sales of electric vehicles go down, and that's the trend we're seeing."

According to a 2022 AAA survey, high gasoline prices are the driving force behind 77% of consumers considering buying electric cars.

1/4 of Americans say electric cars are the first choice for the next car.

Krebs estimates it will take another decade to see electric cars in every driveway. At present, electric vehicles account for a little more than 5% of the entire car market. Krebs expects it to rise slightly to about 10 per cent in the next few years.

The main obstacle for electric vehicles remains cost. According to Kelley Blue Book, the average price of electric vehicles in the United States in June was more than $66000, much higher than the industry average and more similar to the valuation of luxury cars than mainstream prices.

But there are other factors that are still driving the electric car market forward, such as a widening range of driver choices. In just one year, the number of car models has increased from 19 to 33, which is where the electrification choices of big sellers such as the Ford Fmur150 will have a big impact.

Krebs, who predicts that hundreds of options will be seen in the auto market by 2025, points out that it will take time to set up semiconductor foundry and acquire the equipment needed to produce semiconductors.

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