Supply chain crunch means delays for new hybrid and electric cars have grown

When Jesse Chiasson called a car dealership last month to buy a new vehicle, he ended up paying $1,000 to be put on a waitlist instead.

“The salesman was pretty vague but hinted it could be 2024 by the time we get the car,” Chiasson said in an interview from Bathurst, N.B.

“Worst-case scenario, we could be waiting as long as three years.”

Canadians across the country are facing lengthy wait times for new vehicles as an ongoing supply chain crunch and shortage of computer chips hinders carmakers from making enough to meet demand.

The problem appears to be worse for electric automobiles. Government rebates, rising gas prices and growing climate change concerns appear to be worsening the shortage of hybrid, plug-in and fully electric cars.

“We expected a wait but we were still shocked at how long it could be,” Chiasson said of the delay for a new Kia EV6. “They also said the price could change.”

Many vehicles are sold before they even hit the lot, leaving some dealership parking lots nearly empty while waiting lists grow indeterminately longer.

The lack of inventory affects salespeople, many of whom rely on commissions to earn a living.

And manufacturing shutdowns are also affecting auto plant workers.

“We’ve had periods of layoffs or reduced hours for at least 10 weeks in all of these facilities between January and September of this year,” Unifor national president Lana Payne said in an interview.

“For these plants, that’s about a third of their working time that’s been lost this year,” she said. “It’s nearly all related to a shortage of parts — mostly microchips, but other parts as well.”

The auto industry halted production early in the pandemic, prompting chip suppliers to sell to electronics manufacturers instead.

When carmakers came back online, the chips they needed weren’t available. Chipmakers were busy producing more profitable, cutting-edge microchips for devices like computers, cellphones, televisions and even household appliances.

“The auto industry typically uses older chips because they’re more reliable,” Fiorani said. “But they’re not as valuable to chipmakers. They cost less to produce and make less profit.”

The situation has relegated automakers to the back seat of the microchip supply chain, resulting in long delays for the small parts.

In some cases, if the missing chip is part of a bonus feature, the vehicle can be assembled and sold as is and upgraded later. Other chips are needed to sell the car, but the entire vehicle can be built and the missing chip added later, just before its sold.

But in cases where the chip is embedded in a part of the vehicle that can’t be easily accessed or upgraded after assembly, a missing microchip can stop production.

Honda Canada spokesperson John Bordignon said significant global issues are still “very much a part of the new vehicle availability and delivery process.”