higher new car pricing in the future.

 

For both consumers and automakers, 2021 was a year to remember due to a variety of factors, including a lack of critical semiconductor chips, closures at significant assembly sites, increasing car costs, and vacant dealerships. However, there were also significant increases in the sales of electric cars and a growing trend away from sedans toward SUVs and pickup trucks.

So what lies in store for 2022? According to some reports, things may continue to go the same way as dealers struggle to find inventory due to shortages, and consumers will continue to pay higher costs. But if consumers are seeking for electric cars, they will also have a lot more options.

Here are the plots that we predict will be the most popular this year:

ongoing scarcity of products

Automakers cut back on manufacturing and part orders once Covid-19 hit. However, when sales began to pick up, they found they couldn't get all the chips they required, which forced them to make significant production reductions. Approximately $210 billion in sales was lost by the sector in 2021, according to business management consulting firm AlixPartners. Despite tightening, chip supplies are still far from normal, and production cuts will continue to have an impact until at least 2022. Even worse, the sector is dealing with other shortages that affect items like seat foams, interior plastics, and tires.

higher new car pricing

Due to product shortages, manufacturers globally manufactured around 8 million fewer automobiles than anticipated in 2017. According to J.D. Power analyst Tyson Jominy, dealers won't be able to build back stocks until well into 2022, even if production picks up. As a result, purchasers should anticipate few options and a record-breaking rate of price increases. According to industry data, the average price of a new car at the end of 2021 was $45,000, an increase of roughly $8,000 from December 2020.

regularization of online car purchases

The business came up with a fresh idea when the United States went into lockdown. Dealers visited clients online since customers couldn't physically visit them. Even after the nation was reopened, an increasing number of consumers are buying cars online, and many dealers organize test drives and deliver new cars to customers' homes or workplaces. In the meantime, traditionally impulsive drivers have started ordering their cars and waiting — sometimes for months — to take delivery as showroom lots are almost empty.

EVs begin their ascent into first place.

Despite making up a small portion of new car sales in the US, the demand for battery-electric cars more than doubled in the first half of 2021 alone. With the EV industry expanding, GM CEO Mary Barra suggested that this year might signal the "tipping point." There will be a number of elements at play, starting with the abundance of new offerings: This year, analysts predict that the number of long-range models will quadruple.

Build Back Better's effect

The auto industry has received a lot of attention from President Joe Biden. The White House issued its most stringent fuel economy guidelines in December, and Biden has stated that he wants to see up to 50% of U.S. sales of EVs by 2030. infrastructure of him Bill provides funding for an extensive charging infrastructure. However, Congress is currently gridlocked over other funding, like as money to increase EV sales incentives.

Startups will keep upsetting the status quo.

Since World War II, the car industry has mostly been a closed club, but Tesla has demonstrated that the door can be opened. Other startups are now vying for a piece of its success. Many of the most promising players have received rewards from Wall Street. Today, Rivian is valued at more than $90 billion, surpassing both Ford and General Motors. However, certain businesses, including Byton, Lordstown Motors, and Faraday Future, are having trouble and may fail by 2022.

Tesla receives criticism

After hitting sales and profit records in 2021, 2022 appears to be a promising year for Tesla. Two new plants have been opened by the California-based electric car manufacturer, one in Austin, Texas, and the other in Berlin, Germany. But a few crucial Both the Cybertruck and the anticipated next-generation batteries for Tesla are significantly behind schedule. The Chinese government is exerting pressure on Tesla, while American officials are conducting additional safety investigations.

Automated vehicles might stall

Automakers once stated that a fully autonomous vehicle would be available by 2020. However, 2022 might witness some innovations. The first truly hands-free, or Level 3 in the industry's parlance, driving technology will be made available to consumers by GM and Mercedes-Benz. Others are concentrating on ride-sharing services and cargo transporters, such as Waymo and Cruise. However, investigations into Tesla's Autopilot's safety serve as a sobering reminder of how challenging it is to create a fully driverless vehicle.

China gets nearer

Although China is the largest auto market in the world, indigenous producers like Geely and Great Wall seek to expand outside of the country. However, efforts to reach the United States, the world's second-largest market, have frequently been postponed. Under President Joe Biden, trade disputes from the Trump administration have not yet been settled. Therefore, despite the fact that a few Chinese-made goods, such as the Buick Envision and the Polestar 2, are currently on sale in American showrooms, a true automotive invasion may still be years away.