Nick Carey

LONDON (Reuters] – After causing a severe shortage in vehicles in 2021 and continuing to affect British sales in the coming years, the global semiconductor chip shortage is expected to continue to impact British car sales in this year and beyond.

According to the Society of Motor Manufacturers and Traders, around one out six cars that were sold in Britain by 2021 were either battery-electric (BEV), or plug-in hybrids (PHEV). Overall new car registrations increased around 1 percent to 1.65 Million units in 2020 and 1.63 million in 2020.

Mike Hawes, chief executive at SMMT said that it was “not a good year” despite having had an equally difficult year. He was referring specifically to the effect of the shortage of chips on sales. This impeded a post-pandemic recovery.

A shortage in chips is affecting everything, from power steering and brake sensors to entertainment systems. Automakers all over the globe have been forced to reduce or stop production. However, there has been strong consumer demand, which has led to higher prices for both used and new vehicles.

Hawes claimed that an average vehicle needs between 1,500-3,000 semiconductor chips.

Hawes explained that “we believe demand is still there” and said so. The general opinion was that the shortage of chips would harm the market in 2022. This would then “flow on to 2023”, he said.

The SMMT forecast UK car sales at 1.96 Million units by 2022 before the coronavirus outbreak. This is below its normal rate of 2.3 million units.

According to the SMMT, fully-electric BEVs accounted 11.6% of 2021’s sales. This is more than what was reported for cumulative 2016-2020 sales. BEVs accounted for about 25% of UK car sales in December.

8.9% of all sales for PHEVs in 2021 were due to a combination battery-burner engine.

By 2030, the UK will have a ban on all pure fossil fuel models. However, the SMMT stated that there is more to be done in order to reduce electric vehicle costs and improve infrastructure for charging, particularly on-street.

Access to parking on roads in America or Europe is challenging.

Hawes stated that car costs and concerns about charging are “the biggest barriers for people considering purchasing this type of vehicle.” “We aren’t where we should be.”