How long will new car prices continue to rise? An analytical study

New car prices will continue to rise over the next two years, according to an analytical study of the auto industry and global car markets The auto industry is now going through a real crisis, as it is burdened with the burden of shifting from the automobile industry with regular engines to making electric cars, and what this transformation requires of new production lines, infrastructure and technologies, in addition to the consequences of the epidemic still affecting the industry and the waves are still continuing to this day. This, not to mention the Russian-Ukrainian war in Europe, the rise in oil prices and the cost of raw materials, and the shortage in supply lines and in electronic chips in particular. This has prompted many electric car makers such as Tesla, Hummer, Lucid and Rivian to raise their prices in the past few weeks, and the same applies to traditional car companies, as we saw the price hike of BMW cars last month and the increase in the prices of Tesla cars. A little later. On the other hand, under the pressure of these difficult circumstances, car companies also began to delay the delivery of orders and reduce the specifications available in their cars, and it came to some companies to ship their cars without some unnecessary parts, with a promise to deliver these missing parts when the company has them. We regret, dear reader, to inform you that this crisis will be prolonged and will extend to the year 2024, according to a report published by the consulting and data analysis company AlixPaetners, 

Where it was stated in this report that the semi-conductor shortage crisis will continue to have a negative impact on the production process of new cars during the next two years, and this crisis has exacerbated for several reasons, including the high market share of electric cars that will be offered for sale, because most of the companies in the car manufacturing sector are heading to the industry Electric cars instead of cars with internal combustion engines that run on diesel or gasoline To clarify, dear reader, the manufacture of electric cars increases the demand for electronic chips by 55% annually, according to the study, which will remain a bottleneck for the production of new cars. This means that as long as car companies continue to introduce new electric cars, the technical requirements to produce these new cars will increase the already high demand for electronic chips or semiconductors because electric cars need more electronic chips than gasoline or diesel cars. As a result of this, car companies will continue to reduce production levels, which means that the number of cars offered for sale will remain limited in the coming years, and of course this will give car companies the power to raise prices if the demand for new cars remains high, and therefore new car prices will remain high for the foreseeable future. . But on the other hand, this does not mean that car companies make more profits from high car prices, as you might imagine, dear reader. For example, we published an article a while ago about Ford losing for every Ford Mustang Mace it manufactures, in which the Ford manager expressed fears of a recession in the car market. Car prices will continue to rise due to the high cost of raw materials for electric cars and fuel cars alike, as the report stated that the cost of raw materials in conventional fuel cars is $3,700 per car, while the cost of raw materials used in electric cars increases to more than double that amount. And up to $ 8,300 per car, because the battery of the electric car and the electric motor need more raw materials, and to clarify, dear reader, these prices are more than double what they were a few years ago. According to the forecasts of the report published by AlixPartners, electric cars will not outperform traditional cars in terms of market share before 2035, because car companies will reduce the pace of introducing new electric cars, because these cars consume more materials and cost more money, and the popularity of Electric cars between customers need more time, as well as the infrastructure to manufacture these cars, 

The report also adds that there is a need for investments worth 48 billion dollars in infrastructure, but so far, the total amount invested in the manufacture and development of infrastructure for electric cars does not exceed 11 billion dollars, which means that car companies must fill this gap in the coming years, what Puts more burdens on the auto industry