“The problem is, we are lower in the chain than companies like Apple and HP,” said one executive. “The automotive industry doesn’t pay that much for its semiconductors.”
It would not surprise me to find out that Apple makes more money per iPhone manufactured than Toyota does per Corrolla, but I could definitely be wrong about that.
I live in Europe and keep pondering moving to a bigger city and downsize just to give up the need of a car since the maintenance and the rest of the costs are going up faster than my pay. I can see a lot of low-middle class people getting screwed by the rising costs of car ownership long term.
>However, I think the weakness in electrification and software makes it clear that there's little true innovation. Legacy automotive turned into a stable market, and participants were happy to fight over pennies
If you sell millions of cars you can hire a whole team of penny pinchers who will then save your business 10s of millions dollars. Every penny pays for a $100k salary.
If anything the semi conductor shortage is causing downstream issues in VW's ability to produce more ID.3s.
There's also a whole lot of other chips in cars these days.
e.g., the replacement cost of a control board in my furnace is around $800, IIRC. I could probably build it for about $30 in parts (ignoring the software in the microcontroller). However, to someone who's evaluating buying a new furnace vs. repair, that $800 is a hell of a lot cheaper than a new furnace.