2022: How is the Auto Industry Doing and What does the Industry Hold?

The first half of 2022 is behind us, and with school about to start, report cards will be here before we know it. In that same light, the auto industry has published its statistics for the first six months.

Additionally, we discuss threats that arose during the first half of 2022 and their impact on the auto industry for the remainder of the year and perhaps longer. Finally, we offer a few predictions for the second half of 2022.

Ongoing product shortages

As Covid-19 struck, automakers slashed production and parts orders. But when sales started to rebound, they discovered they couldn’t get all the semiconductors they needed, leading to major production cuts. The industry lost around $210 billion in revenue in 2021, according to AlixPartners, a business management consultancy. While chip supplies are loosening up, they’re far from back to normal, and production cut be hurt well into 2022. Worse, the industry faces other shortages affecting products like tires and interior plastics and seat foams.

Higher prices for new cars

All told, automakers worldwide produced about 8 million fewer vehicles than planned last year because of product shortages. Even if production rebounds, dealers won’t be able to build back inventories until well into 2022, J.D. Power analyst Tyson Jominy said. As a result, buyers should expect limited choices while prices will continue to rise at a record rate. At the end of 2021, a typical new vehicle cost $45,000, up about $8,000 from December 2020, according to industry data.

The impact of Build Back Better

President Joe Biden has put a lot of emphasis on the auto industry. In December, the White House announced its most aggressive fuel economy standards, and Biden has said he wants to see EVs account for up to 50 percent of U.S. sales by 2030. His infrastructure bill delivers funds for a nationwide charging network.

Road Trucks, Freight & Zero Emissions Vehicles

Road freight had a reasonably strong year – for the 12 months up to October 2021, road freight in Europe was 8.3% higher than the equivalent period up to October 2020. his has not reached pre-pandemic levels in Europe, but there are signs of a rebound across the world.

Truck brands values have had a similarly mixed result this year, with reasonably weak signs of a recovery, but signs nonetheless. Scania, Volvo Trucks and UD Trucks all registered small increases in brand value, but conversely, MAN registered an 18% fall in brand value to US$2.2 billion.

Startups will continue to shake things up

The automotive industry was a largely closed club since World War II, but Tesla showed it’s possible to crack the code. Now, other start-ups want to share in its success. Wall Street has rewarded several of the most promising players. Rivian now has a market cap of over $90 billion, more than either Ford or General Motors. But others, like Byton, Lordstown Motors and Faraday Future are struggling and could fall aside in 2022.