It’s been no secret that President Biden and Vice President Harris have been concerned about the semiconductor chip shortage—something the country has been struggling with since late 2019. Now, President Biden’s CHIPS and Science Act of 2022, an executive order, was recently signed into effect.
This executive order will help ensure that America will have a stronger grasp on the tech industry. The car industry, in particular, will be benefiting from this new initiative from the White House. But how will it work?
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, particularly when it comes to getting a fair price for your premiums. We can help you find out if you’re getting ripped off. What is the CHIPS and Science Act of 2022?
According to the White House
, this new semiconductor chip bill, the CHIPS and Science Act of 2022, will help to lower manufacturing costs for producers while lowering costs at stores and other retail locations for consumers. The CHIPS law will also help to create high-paying manufacturing jobs on American soil to ensure that the U.S. is less reliant on foreign supply chains. Part of the law was spurred by serious semiconductor shortages
. Some of the bill’s funding draws from investments from the Bipartisan Infrastructure Law and Inflation Reduction Act. How will the new semiconductor chip law affect carmakers?
Carmakers operating within the U.S. will find it easier to find the semiconductor chips they need to produce today’s vehicles, which are heavily computer-reliant.
In addition, carmakers who are having to rely on China for chips may be swayed to change providers, and will especially be encouraged to do so if they’re building EVs. After all, the most recent EV tax credit adjustments only apply to EVs that have been manufactured with American parts.
VentureBeat
also offers encouraging predictions for the car market, stating that when it comes to “automotive [manufacturers], there’s years of inventory that they still need that they’re behind on. Automotive will continue to push demand, even if we see things like phone sales starting to slow, or PC and laptop sales starting to slow.” The article goes on to state that many analysts believe the chip shortage will be patched up by the end of 2022.
MORE: The Long-Term Effects of the Chip Shortage
Will customers see the benefits of the new semiconductor chip law?
With an easier time getting their hands on the semiconductor chips that they need, carmakers might even start to lower prices—a huge win for buyers. The demand for vehicles is still high, but with semiconductor chips in high supply (hopefully by early 2023), prices could very well drop as automakers catch up on their lagging inventory. This could prevent dealerships from continuing to mark up hotly-desired vehicles.
Unfortunately, there’s also the chance that carmakers could decide to keep prices elevated. As long as consumers are still willing to pay extra, high price tags could just become the new normal.
MORE: Chipmakers Are Telling Car Manufacturers to "Join the 2010s"
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