The semiconductor shortage is expected to cost the global automotive industry $110 billion in 2021.
Ford and GM have cut their earnings expectations by $2.5 billion and $2 billion, respectively.
"This is going to be longer and more difficult than most people think," one dealer told the WSJ.
The semiconductor chip shortage is roiling the global supply chain, but no sector is feeling it worse than the auto industry.
A new estimate from the consulting firm AlixPartners puts the global industry cost of the shortage at $110 billion this year, up from an earlier estimate of $60 billion in January.
"The pandemic-induced chip crisis has been exacerbated by events that are normally just bumps in the road for the auto industry, such as a fire in a key chip-making fabrication plant, severe weather in Texas, and a drought in Taiwan," Mark Wakefield, who heads up the firm's autos research, said in a press release.
The firm says the disruption will lead to the production of nearly 4 million fewer vehicles than automakers had planned, almost double the amount in January's estimate.
Ford and GM have both cut revenue expectations by $2.5 billion and $2 billion, respectively, and Brian Gu, vice chairman and president of Chinese electric car start-up Xpeng, told CNBC that "the visibility of chip supplies is by the minute."
"We are paying very, very close attention to the situation," he said.
According to AlixPartners, one reason automakers are feeling especially pinched is because their products generally use lower-tech chips that don't command the same profits for chip makers. They also need a lot of these chips - about 1,400 per vehicle.
It's simply hard to compete with demand from more advanced manufacturers, especially when highly profitable markets in cloud computing and cryptocurrency mining are on the rise.
Since the chips are an integral part of everything from safety systems to engines, some plants are producing unfinished vehicles and parking them until the chips arrive and can be installed. A Ford spokesperson told the Journal the company had more than 20,000 vehicles parked near factories waiting for chips.
That's little comfort to auto dealers like David Kelleher, who told The Wall Street Journal his lot has just 98 vehicles ahead of the summer sales season. He usually stocks 700.
"This is going to be longer and more difficult than most people think," Kelleher said.
Ford dealer Claude Burns told the Journal his new car inventory was less than a third of what he normally has on his lot.
"I figure we'll hit the pits of hell by middle of June in terms of new-car inventory," he said.
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