The crisis in Ukraine is only adding more insult to injury for the U.S. auto industry.
It already has been grappling with interrupted supply chains and the ongoing global semiconductor chip shortage.
In response, the U.S. and Nato allies have imposed harsh economic and financial sanctions on Russia.
What’s happening overseas is going to impact us here at home in one way or another, be it inflation, gas prices, energy prices, or transportation.
“There are several materials that are used in semiconductor manufacturing that come from Russia. If this war drags on and there’s sanction that prohibit trade between the U-S and Russia, it could make the semiconductor shortage worse,” said Chris Douglas, U of M-Flint economics professor.
And that means, for those who are in the market for a new car, don’t just plan on waiting a longer time for delivery, but also expect to shell out more money.
The average price of a new car in the U.S. is around $46,000, up more than 12% from this time last year.
Economic experts believe that number will only keep going up, especially if the war in Ukraine continues for a long period of time.
For those looking to dodge the high gas prices by going electric,
“There are elements that are used for car batteries that come from Russia. Not exclusively, but a good chunk like lithium and nickel come from Russia. So if that supply dries up due to sanctions from the war – that’s going to push nickel and lithium prices up which will make electric cars more expensive,” said Douglas.