Russian war could increase prices and shrink supply of cars

There has been a shortage of computer chips and other parts for the global auto industry for more than a year, resulting in production and delivery delays, as well as prices that are beyond the reach for millions of individuals.

A newly discovered obstacle, the conflict between Russia and Ukraine, has delayed the production of critical electrical wiring made in the country. Prices for vehicles are expected to remain high well into next year as buyer demand is high, materials are scarce, and the war is causing new disruptions.

A BMW plant in Germany has been shut down and an assembly plant in Mercedes is slowing down production. VW is looking for replacement parts as a result of production stoppages.

European automakers have been hit the hardest by the war's damage. However, Russian exports of metals, from palladium for catalytic converters to nickel for batteries for electric vehicles, will ultimately affect U.S. production as well.

4 April 2022