Chip shortage continues to impact car sales

Ireland and Britain have seen a surge in electric vehicles sales.

New car sales in Britain have slumped due to the impact of the pandemic and a worldwide shortage of semiconductor chips.

The scarcity of the devices, together with the impact of Covid-19 has caused new car registrations to dive by 28.7%, compared to the 2.3m registrations in 2019, making it the second worst year for the market since 1992.

“It’s been another desperately disappointing year for the car industry as Covid continues to cast a pall over any recovery,” said Mike Hawes, CEO of the Society of Motor Manufacturers and Traders (SMMT).

Manufacturers continue to battle myriad challenges, with tougher trading arrangements, accelerating technology shifts, and, above all, the global semiconductor shortage which is decimating supply.

The growing need for semiconductor chips has created a global supply and demand issue and has caused some businesses to come to a standstill, including Toyota, Ford, and Volvo which slowed production at their factories last year.

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New car registrations in Britain did grow marginally by 1.65m in 2021, a 1% increase compared to 2020.

However, the jump in sales of hybrid and electric vehicles indicates there is hope for the industry.

Figures from the SMMT showed a record one-in-six plug-in vehicle registrations on the British market in 2021, while battery-electric cars alone rose to one-in-nine, with more registered than in 2016 to 2020 combined.

Ireland also showed a spike in interest for electric and hybrid cars, which bolstered the motor industry during 2021. 

Last year, 8,646 new electric vehicles were registered on Irish roads compared to 4,013 in 2020, according to figures from the Society of the Irish Motor Industry (SIMI).

“The most positive aspect of the new car market is the ongoing growth in the electric car segment, with a further increase in EV sales anticipated next year,” said SIMI director general Brian Cooke.

In total, there were 104,932 new car registrations on Irish roads in 2021 compared to 2020, according to the Irish motoring industry. 

This 19% increase however, is still behind the pre-pandemic level of sales in 2019.

The market for electric vehicles is predicted to be heavily impacted this year by the recent removal of the €2,500 Plug-In Hybrid Electric Vehicle grant.

Electric vehicles, plug-in hybrids, and hybrids continue to increase their market share, now over 31.62% in Ireland. 

Diesel now accounts for 33.50%, petrol 32.20%, hybrid 16.19%, electric 8.16%, and plug-in electric hybrid 7.27%.