Do you remember the automotive chip shortage? Do you remember how much that sucked? This time it’s back, though in a curious way that has nothing to do with a global pandemic or even automaker overreaction. Nope, it’s just politics.
For today’s Morning Dump, I’m going to take a closer look at what happened, what’s happening, and who is maybe going to get impacted the most.
Also, it has nothing to do with chips, but that cheap Kia EV everyone was hoping for ain’t coming anytime soon.
Boo! You’re In The Timeline Where A Dutch V. China Spat Might Ruin Your Day
I feel like calling anything that’s a rerun of a prior event “Blank 2: Something Boogaloo” is extremely Millennial coded. This is amusing because the film (a sequel) was neither very good nor popular, and came out in 1984, which is pretty close to the cutoff for being a Millennial. Why do all Millennials make this reference? Also, why did I not know that Ice-T appears as himself in all three films? [Ed Note: I have no idea what Matt is talking about. -DT]
It’s the things that you don’t know that hit you the hardest. These are Donald Rumsfeld’s “unknown unknowns.”
When the pandemic first paused our lives, back in 2020, production was slowed down for the obvious reason that no one knew how it was spread, so going back to work in person was halted. Car sales also plummeted, and it was assumed car-buying would as well. What was less obvious to those outside the industry was that carmakers halted chip orders, thinking they wouldn’t need the expensive parts.
In retrospect, what wasn’t obvious to most automakers (Toyota is sort of the exception here because Toyota had experienced a chip shortage post-Tsunami and had maintained larger stores) was that a huge rise in demand for personal electronics would shove their chip requests to the back of the line, thus hampering car production for almost three years.
Carmakers, you might assume, have learned the hard lesson. That largely seems to be the case, and no one is cancelling any orders anytime soon. Instead, the culprit is a showdown between the Dutch arm of a company (Nexperia) and its Chinese parent (Wingtech), which itself is kind of a proxy for the conflict between China and the West. Nexperia provides logic chips and transistors to automakers and suppliers.
The short of it is that the Dutch arm of the company accused the Chinese arm of stealing technology and effectively gutting the Dutch operation. Based on the company’s press release, it sounds like employees at the company went to the Dutch government, which led to the dismissal of CEO Zhang Xuezheng and the removal of voting rights from Wingtech.
[T]he Dutch Ministry of Economic Affairs observed that Nexperia’s operations in Europe were being compromised in an unacceptable manner. This situation raised broader concerns for the Dutch government about the availability of semiconductor products critical to the European industry.
The combination of Zhang Xuezheng’s behaviour as CEO and (indirect) shareholder, as well as concerns about the semiconductor product availability in the Netherlands and Europe, ultimately led to the Dutch government to intervene with an exceptional emergency order on the basis of the Goods Availability Act (Wbg).
Under this order, Nexperia is prohibited by the Dutch government from relocating company parts, firing existing executives and/or making other decisions without explicit permission from the Dutch government for a period of a year. This order is intended to prevent the goods manufactured by Nexperia from becoming unavailable, thus protecting Dutch and European economic security.
Somewhat predictably, the Chinese arm of the company and the Chinese government didn’t react positively to this development. In addition to denying any wrongdoing, China demanded the reinstatement of the CEO. Where this gets tricky is that Nexperia ships wafers from the Netherlands to its plant in Dongguan, China, which is then supposed to ship final products to customers. Can you guess what happened next?
The spat has heightened tensions between Europe and China, which imposed export restrictions on the Chinese facility following the Dutch government’s move to take veto powers over Nexperia. That meant that although the wafers were being delivered to the Dongguan site, the chips weren’t being delivered to customers outside China.
And now Nexperia is no longer shipping wafers to China, and its Chinese facility isn’t shipping final products to anyone outside China, which means this crisis is going to go on a bit longer. Who got hit?
Toyota Is In The Clear
Remember how I said Toyota is a smart company? From the sidelines of the Tokyo Auto Show, CEO Koji Sato told Automotive News that the company felt prepared for any disruptions:
Is there a risk? Yes, Sato says. Does Toyota face a looming shutdown? No, he assures.
“Currently, we don’t see any big damage for Toyota,” Sato said Oct. 29 on the sidelines of the Japan Mobility Show, adding that the company is closely monitoring the situation.
“There is a little risk, but it’s not going to cause a big shortage of semiconductors all of a sudden,” Sato said. “We have other more serious issues on a day-to-day basis than this.”
Again, this is a company that learned from natural disasters.
VW, BMW, Ford, ZF, Stellantis, And Nissan Are Among The Concerned Companies
It’s one of those crises where it’s easier to just point out who isn’t in the crosshairs, which seems mostly like Toyota, and even then, there’s some risk. Part of the issue is that Nexperia supplies key electronics to both automakers and suppliers, so even if a company doesn’t work directly with Nexperia, it might need a sensor or control unit that has Nexperia parts inside.
ZF, the company that supplies tons of drivetrain components (and just about everything else) to major carmakers, is in the crosshairs according to Bloomberg:
ZF Friedrichshafen, the world’s fourth-largest auto supplier, has cut shifts at its main electric drivetrain plant in Schweinfurt because the availability of important components has tightened, the people said, asking not to be identified because the information isn’t public. ZF supplies most major automakers, including Mercedes-Benz, Stellantis and Ford Motor Co.
And, from this Reuters report, there’s news that there’s a “war room” being set up by one automaker to deal with this:
Industry bodies have sounded the alarm over the possible impact on production, with Stellantis saying on Oct. 30 that it had set up a “war room” to monitor the situation.
Volkswagen said production at its German sites is secured for next week as of Oct. 30, but warned that disruptions remain a risk. Nissan said it had enough chips at the moment to last until the first week of November without disruption.
Some Nexperia products that used to cost just a few Chinese cents have gone up in price to two or three yuan each over the past two weeks, more than 10 times their original cost, according to a source familiar with the matter.
This is obviously great news because cars were getting too cheap and easy to make.
So Much For The Affordable Kia EV4
Thomas wrote earlier this year that he was worried the bug-like Kia EV4 was “too weird for America.” We may never know, because the cheaper EV isn’t coming, according to Inside EVs:
The EV4’s U.S. release is no longer happening, at least for now, a Kia spokesperson confirmed to InsideEVs. “Kia’s full range of vehicles offers meaningful value and inspiring performance to customers,” he said. “However, as market conditions for EVs have changed, the release of the upcoming EV4 electric sedan will be delayed until further notice.”
There’s nothing worse than hearing that a car you might want is delayed “until further notice.”
What I’m Listening To While Writing TMD
One of my favorite film/tv tropes is song you know performed slower by modern female vocalist. It always works on me. I’m not sure if Lana Del Rey’s cover of “Season of the Witch” goes full Nouvelle Vague, but it’s close. It still feels appropriate for today.
The Big Question
Which car has the scariest-looking grille/front fascia?
Top photo: Breakin’ 2, VW, ZF, Nissan
Hmm, Predator grille on Lexuses? I’m not nearly as negative about it as some, but Predators are undeniably scary.
An EV is no longer coming to the US? <fry-shocked.gif>
David, your editor’s note was unnecessary. We all know you live under a Pop Culture rock.
Nah, it was perfect! Also, I’m under that rock with him (causes of our conditions are similar).
I agree. I laughed too
Regarding the EV4, I had the drop on that in an email I sent to the tip line on September 10. Noticed when randomly browsing the Kia site (what you don’t browse configurators?) that the EV4 was no longer listed under Future Vehicles! The Autopian could have broken the news first! In all seriousness I don’t think it matters as this thing would never have sold well.
Good on the Dutch. As an automaker if you didn’t diversify your supply chains after covid that’s on you.
There’s only two things I can’t stand in this world.
While I love the “Electric Boogaloo”, and I really, really do, I would also offer up, “This time it’s personal”. These are both my “Part 2” go tos.
I’ve always been a fan of the “-er” sequel names, most famously Die Hard II: Die Harder.
Chip Shortage 2: Chip Shortager
I wanted to see the Taken trilogy as “Taken”, “Taken 2, The Takening” and finally “Took”. Would’ve put a smile on my face.
I’ve never seen Breakin’ 2, but as a young Gen-Xer or elder Millenial depending on who you ask I have used the Electric Boogaloo reference many times.
Scariest looking grille? BMW XM Red Label.
Seems like an appropriate time for this Austin powers clip: https://www.youtube.com/watch?v=zcUs5X9glCc
Any of those BMW grills that look like a Transformer version of a Lamprey ready to attach to to a larger vehicle and suck all the battery power out of it’s host.
I wonder if this might lead to a tech consortium of automakers together starting a chip foundry. Once is a whoopsies, but twice means that they are very susceptible to market forces around the chip market. Likely would make sense for them to create the Automakers chip supply company, to remove some competition with other electronics.
I bought my little Nissan Frontier in January 2020 for a really good deal; in hindsight, I didn’t realize just how smart of a move I made buying when I did
I did something similar, got the mortgage loan for my home the very week before rates started going up. In hindsight I recognize it was 100% pure luck, nothing to do with smart.
So true. It isn’t like we knew we could get 0% for 7 effing years on the Ionic commuter car in 2020, but then looking at it as time goes by those self inflicted pats on the back for innate intelligence are comforting.
I’m far too old to be a millennial, but of course I knew the ‘Electric Boogaloo’ reference despite never having seen those movies. It’s permeated pop culture long ago, though don’t ask me to spontaneously provide an example.
Who knew that 2020 was the last good year to buy a new car? I didn’t, but wish I had. Had I known, I’d probably have bought a humble Toyota Yaris iA hatch, or maybe a Corolla hatch with the now-extinct manual transmission. If hindsight were 20/20, maybe I’d have spent more on something fancier, but had a time traveler from the future (our present) told me how hard it’d be to buy any decent, affordable car with a minimum of personality in 2025, I’d probably have run right over to the local Toyota dealer with my checkbook in hand.
So: Kia killed the Soul, and isn’t bringing the EV4 to America, and TBH, I’ll be a little surprised if we ever see the better looking EV3 either. What’s the point of interesting design and feature-laden content when you’ve got to spend as much as a Toyota or Honda to get it? The whole value proposition behind Kias and Hyundais is that they provided more for the money, along with a long drivetrain warranty to offset anxiety about not buying a Toyota or Honda. Now watch them only offer the K4 hatch with a CVT… thereby squandering much of the goodwill they’ve earned (in my eyes) over the past several years.
Fun fact: the Boogaloo part of the film’s title came from one of the lead actors who went by the performance name of ‘Boogaloo Shrimp’.
I wish I were making that up.
That’s The Honorable Boogaloo Shrimp, Esquire to you, bub.
I thought Breakin’ 2: Electric Boogaloo was more of a Gen X reference.
It is, Millennials were too young to bask in that level of 80s excellence. Everyone I’ve ever known to use this is Gen X.
I can confirm this.
I’m a millennial, and I electric boogaloo the hell out of just about everything.
Granted I understood the reference and my pop-culture knowledge leans older than I am, mostly thanks to my dad managing a few Blockbusters when I was a kid.
I, an Millennial, have never heard of Breakin or Breakin 2.
My frame of reference is the It’s Always Sunny episode, “Chardee MacDennis 2: Electric Boogaloo”
Sorry it’s pronounced Breakin 2:Electric Boogaloo.
You’ve got to say the whole thing, like A Pimp Named Slickback.
“And yes that includes, the ‘A Pimp Named’ part”.
RE – Chip shortage 2 : The Revenge (what you should really call such a scary sequel)
Things are going to get real ugly real soon. Gov’ts all over have decided they have to insert themselves into supply chain management to address national security concerns.
People don’t seem to realize that from design to final qualification, every electronic device they own has done more world travel then they ever will.
Everyone sees China as the boogeyman plotting and scheming to undermine others’ grip on advanced technology. They are only partially right. EVERY gov’t is the boogeyman to some extent. People should be watching what is going on with Intel and the US gov’t. Intel 18A is about to get propped up HARD if the gov’t ever opens back up. This is going to piss everyone off, it’s putting a whole fist on the scales of capitalism.
Buckle up, predictability for supply chains will be getting scarce.
Good observations.
Re: the Intel govt takeover, the GOP has always been pro-nationalization, right?
Right..??
Scariest grill? The refreshed NC Miata.
I don’t care what anyone says…that innocent smile is pure Chucky.
(M.I.A.T.A.)
NC-1 was fish face’d bar of soap.
NC-2 was happy, but fine.
NC-3 was indeed going into “Concern intensifies” territory.
I went with an NC1 (a 2008), specifically because I didn’t like the Joker mouth on the NC2, or the 3.
I don’t mind it so much in the ND, but on the NC to me it just screamed “shit eating grin” and I really didn’t care for it.
I had an NC-1 because NC-2’s didn’t exist yet.
For the engine and transmission revisions I would’ve preferred an NC-2.
I hear you about the updates. I just couldn’t get over the face on the NC2.
Either way I was looking at used. It’s a summer toy that took me (literally) 25 years to be in a position to get, so I did have options (except the ND – it wouldn’t be out for another two years).
Part of me still wishes I’d have gone with an NA.
Two thoughts on the latest chip fiasco:
1) When China started requiring western companies to team up with Chinese companies to do business in China, they basically told us to our faces that they were planning to steal our technology. How we are still surprised every time this happens is somewhat puzzling.
2) The Chinese have always done a better job of focusing on the long term, while American leaders can barely be bothered to think past the next quarterly earnings report or the next election. In a sea of weaknesses, this is a Chinese strength.
Given that, I think the Chinese have been making a mistake by withholding things from western companies (in this case chips, in other cases rare earths) as a negotiation tactic. Every time they remind us in the west of our China dependence, they weaken their long term position as the world’s manufacturing hub.
1) So why those western companies were so stupid and still did business in China when China have told them their technology would be stolen?
2) So why American government still begging China to make a trade deal when they know they are dependent on China?
1) Because in the short term – the one my bonus relies on – there’s money to be made! What happens after the technology is stolen is the next CEO’s problem.
2) Doesn’t the second half of this question pretty much answer the first half?
1) Because CEO’s are judged quarter to quarter and their is no personal upside to playing the long game for corporate leaders.
2) The Chinese can play chicken longer than their rivals because they don’t care if their citizens suffer the consequences because their leaders don’t have to worry about being elected.
. . . aside, China has decided to flex these past few years because they’re on the clock. There are half a dozen factors that will weaken (if not cripple) them in the next generation (demographics, environmental, economics, geopolitical) and their window to “bust a move” is closing fast and they have a long laundry list of things they want to sort out.
So, in short, China has chosen to Not Just Stand there…
If you’ve ever watched Arrested Development, there’s a great scene in which Tobias Funke and his wife discuss the merits of an open marriage (https://www.youtube.com/watch?v=Po4adxJxqZk).
And you’d think that CEO’s and board rooms staffed by presumably intelligent people would not fall prey to the same delusions. Alas, I’ve been in the board room (pre-COVID, I almost got my ass fired for being too anti-CCP in an article I wrote for the Register in a discussion of Chinese state-sponsored economic cybercrime) three times now where the C-Suite essentially decided “Yeah, everybody else falls prey to IP theft… but it won’t happen to us!”
Haha that clip is gold. Nails it!
Edsel? Nah, too easy.
Cybertruck? Nah, too topical.
GNX? Nah, it’s not that scary a face when you realize it’s just a Regal dipped in black ink.
Melancholic Angel’s RX-8? Nah, that doesn’t exist and can’t hurt me.
…oh gawd the face-lift GT86. D:
1st gen Tesla Model 3 – its front fascia always reminded me of when Mr. Anderson (Neo) had has mouth melted-shut by Agent Smith during their first encounter in The Matrix.
Last Avalon had not the scariest grille, but the worst. It’s only a 2GR under the hood.
Grilles are the new exhaust tips.
”But I need that grille for cooli — “ Super cars with their engines behind the cabin have smaller grille openings. To be fair, some cars need the grille for cooling, because the entire cooling system was built to a price. So sometimes a big cheap grille is the solution. Yet something like a Corolla has a huge grille, but mostly blocked.
As for exhaust tips, “I need it for the power—“ there are 700HP cars with only two exhaust tips. They also have two cylinder banks, not one like your inline four.
It feels like you’ve got some repressed feelings about someone with a small car.
Do you want to talk about it?
Nope. Save the first one, I’ve only ever had small cars.
If anything, back then, “extra stuff that does nothing” I hated because it added cost and weight for no reason. I’m paying more for no added value.
For the “cheap cars with giant grilles”, I wonder how that affects repair costs in a fender bender. You’ve got more area to mask out when painting. The assembly itself is more expensive. Cheap car more expensive for no good reason.
It’s a contributing factor as to why there aren’t truly “cheap cars” anymore: Tacking on shit we don’t need to impress people we don’t like, instead of a cheaper car that still does the job and leaves more money in the customer’s pocket to spend on things that actually matter to their day-to-day.
It’s all integrated into the bumper cover these days anyway. One big singular part.
Whenever I see the dual exhaust tips on an economy car, I always think wow, just imagine the engineering effort for 2 exhaust manifolds for a 4cyl engine. But the worst is when they simply weld another tip to the muffler.
Some cars (even with 2 cylinder banks) even hide their only exhaust under the bumper, so it looks like there are zero exhaust tips (my old E39 540i)
Or, faster, like X’s “Breathless,” for the remake of that Nouvelle Vague movie of the same name.
Late Boomer here, and I make that reference very often, because it is the stupidest sequel name of all time. It is used to make note of whatever stupid sequel or stupid presidential second term that comes to mind.
RE: EV4 news
Does that mean Canada will become a nearby conclave of forbidden automotive fruit?
I’m just waiting on greater harmonization with European standards. It’ll more likely be kicking open the door to whatever China feels like sending us which probably ends in some interesting stuff, but probably a lot less choice in the long term.
Possible EU standards acceptance, possible chinese EVs/vehicles, I’m really liking the automotive direction Canada is taking. I could deal with us being more like the Australian car market. They get so much cool stuff.
Speaking of, has anyone heard from Lewin in a while?
Australian market, in losing the automotive manufacturing, lost a lot of the related companies that supported the automotive industry.
It makes manufacturing other things within Australia far more difficult without those suppliers being there (creating self-fueling downward pressure on some industries).
They have been!
Is it the most exciting car in the world? No. But I still get excited when I see a Mercedes B-class with Ontario plates driving around in western NY.
Breakin’ 2: Electric Boogaloo is so peak 80’s it hurts. Our adult friend group tried to figure out what movie captured the 80’s best, and this was in the running.
Whatever Alec B. is driving has the scariest grill.
Why do all millennials make this reference? Probably for the same reason they often cite cassette tapes as a big generational thing, even though they wouldn’t likely have owned many by the time they might have had the money in the mid-90s.
Final (4th) gen Pontiac Firebird for scariest, with its overall Lovecraftian hellspawn styling. Some things humans just shouldn’t see.
I’ll have you know that my cassette collection of lullabies and sing-along songs was vast and extensive, thank you very much!
I always thought the WS6 Firebird with the stacked nostrils resembled a dragon, ready to eat whatever was in front of it, so yeah.
Older millenials absolutely owned cassettes. CD players didn’t become mainstream until I was in middle/high school. I listened to enough cassettes over the years that I have an irrational nostalgia for that trademark hiss.
Ed Note: I have no idea what Matt is talking about. -DT]
Don’t worry David, I think they cover this in an episode of Cocomelon. You’ll get to experience that shortly.
A red 1958 Plymouth Fury has always had the scariest grill to me. (Matt may need to explain this to David also.)
The scariest front end is the one on the huge pickup that looms so large in the rearview mirror that I can’t see the other vehicle’s windshield.
Where hood isn’t anywhere visible (as it’s well above your field of view), and headlamps are at, a minimum, retina height – focusing the power of the sun to the back of your skull through your rearview mirror?
That’s the one! Though you do get lucky on occasion and the headlights are actually higher than your roof.