Chip Shortage To Cost Auto Industry $210 Billion This Year

The ongoing semiconductor chip shortage is now forecast to cost the global automotive industry an estimated $210 billion U.S. in lost revenue this year.

The forecast from consulting firm AlixPartners is almost double its previous estimate of $110 billion U.S. back in May.

The New York-based firm first released an initial forecast of $60.6 billion U.S. in lost revenue in January of this year when the parts problem started causing automakers to cut production at manufacturing plants.

AlixPartners is now forecasting that 7.7 million units of production will be lost in 2021, up from 3.9 million in its previous May prediction.

Automakers around the world, including Ford (NYSE:F) and General Motors (NYSE:GM), have warned of earnings cuts this year due to the persistent microchip shortage. But some of those losses have been offset by resilient consumer demand and higher profits from record vehicle prices.