- [Narrator] Cars today are far more complex

than ever before.

They need anywhere from several hundred semiconductors

to more than a thousand.

And these chips control everything from the ignition

to the braking system and making sure your seat

is in the perfect position as you drive.

- [Mike Colias] Individual chips,

they're packaged inside these electronic control units.

They, sort of, act as almost, like, separate organs

that have a different function in the human body.

They basically tell the hardware what to do electronically.

- [Narrator] But now auto makers can't source

the semiconductors fast enough

and many cars are sitting in parking lots waiting for chips

because, during the pandemic, chips for vehicles

were diverted to meet a surge in demand for electronics

as people were stuck at home.

And their availability has become tighter also

because of natural disasters that disrupted the supply chain

and the resurgence of COVID cases

in important chip-making regions.

This crunch could cost global auto makers

around $110 billion in revenue this year.

- This crisis has really forced auto makers

to, kind of, rethink both in the short term

and the longterm, how they manage their chips

and their supply chain.

- [Narrator] So, here's how companies

are adjusting their production plants

and what that means the next time you want

to drive a car off the lot.

One of the first solutions

when you don't have enough of something, try to use less.

So some automakers are dropping features that require chips.

- Well, they're, sort of, small add-on features,

I think people have been willing to overlook that.

- [Narrator] Some car dealers in the US

said the global auto company STELLANTIS,

which owns Jeep, Ram and other brands,

shipped some pickup trucks

without an Electronic Detection System,

which looks out for blind spots.

In another example,

GM said it was building some full-size pickup trucks

without software that helps manage fuel consumption.

And Elon Musk said that Tesla was removing

the adjustable lumbar support from the front passenger seat

of some vehicles due to major industry wide

supply chain pressure.

- It hasn't been a big hit, sort of, reputationally

or from a market share standpoint

that they've been, kind of, forced to take that step.

- [Narrator] For instance,

STELLANTIS reported more than $89 billion in net revenue

in the first half of this year,

while General Motors had a strong second quarter

with $2.8 billion in net profit.

But auto makers have had to make some tough choices,

like choosing between vehicles.

- [Mike Colias] Car companies are all trying to figure out

what, prioritize what they wanna make

and what can be sacrificed.

- [Narrator] For instance,

General Motors said it's been shifting computer chips

away from its less profitable vehicles

and using them in it's more popular ones.

But even with diverting inventory,

there's no guarantee that there will be enough chips

for the vehicles that have been prioritized.

- [Mike Colias] When they may not have one of the chips

that they need, they'll continue to build those vehicles,

and then they're setting them aside in parking lots

around the factory and waiting for chips to arrive.

- [Narrator] This is what some in the industry called

the build-shy strategy.

- The good part about that strategy is,

that it allows them to keep the factory running,

'cause it's costly to keep turning off

and turning back on your factory.

- [Narrator] But this can mean chipless cars end up sitting

on the lot for an indefinite amount of time.

Ford said that at the end of March,

it had more than 20,000 vehicles parked

and waiting for chips.

- [Mike Colias] GM over the summer,

they said they had 30,000 pickup trucks

at a plant in Missouri.

- [Narrator] While these strategies have helped companies

to keep going in the short term,

it's also forced them to plan for the future

by rethinking the entire process.

- For decades, the auto industry has really, kind of,

perfected this just-in-time model,

where components arrive at the factory

and even right at the assembly line, just as they're needed.

That allows them to lower their inventory costs

and there's a lot of efficiencies that go with that.

- [Narrator] But the chip shortage

has shown this model breaks down during a global crisis

like the pandemic.

- Companies are looking at moving to stockpiling

really crucial computer chips.

There's been direct outreach from, you know, auto executives

to chip suppliers, which, you know,

hadn't been happening in the past.

- [Narrator] And auto companies

not only want more visibility in the supply chain,

but also more direct control.

- Some of the companies have talked

about even getting more involved

in designing their own chips,

designing components to need fewer chips.

I know Ford, specifically, has talked about that.

- This is infrastructure.

- [Narrator] There's also a big push from the US Government

to shore up its own domestic chip making capacity.

The Biden Administration has said it would prioritize

increasing domestic chip manufacturing

by investing roughly $50 billion

toward research and development.

But building new foundries and increasing chip production

will take years.

And that means auto makers will likely continue

to scale back production.

In early September,

GM said it's temporarily idling two main factories

that produce its pickup trucks,

while Ford said it's temporarily halting a production

of its F-150 at its Kansas City factory in Missouri.

Even some of the more chip-ready auto makers like Toyota,

said it would cut production in Japan by 40% in September.

And in the short run,

all this won't be good news for customers.

- There just simply aren't enough cars.

Usually, Americans wanna drive off in a car that day

and that's not happening nearly to the same degree

as it normally has.

(upbeat music)