Nissan’s Chief Operating Officer Ashwani Gupta warned on Thursday that the semiconductor “crisis” will not be 100% recovered anytime soon.
“Last year was really tough for us to manage the supply chain, especially the semiconductors,” Gupta told “Mornings with Maria” on Thursday, noting that “we feel sorry for the customers, [the] almost 15% of the customers to whom we could not supply the cars because of [the] semiconductor crisis.”
Earlier this month, US Commerce Secretary Gina Raimondo warned that there will be no quick fix to resolve the semiconductor shortage contributing to supply chain disruptions causing a ripple effect across the economy.
“There has been a slow deterioration of our manufacturing base in America over decades, and we need to start now to rebuild,” she said during a call with reporters.
NO QUICK FIX FOR CHIP SHORTAGE: COMMERCE SEC. RAIMONDO
The week before, the House of Representatives passed the America COMPETES Act of 2022, which aims to strengthen semiconductor chip production and make America more competitive with China.
The 2,900-page bill, which is similar to the US Innovation and Competition Act passed by the Senate in June, includes $52 billion to support domestic semiconductor manufacturing and research, $45 billion to strengthen the supply chain, and $160 billion for scientific research and innovation .
Gupta told host Maria Bartiromo on Thursday that he thinks “things are getting better,” but added that he also believes “that this will not be 100% recovered just because the disruption during the pandemic has created a big challenge in the whole supply chain. “
Earlier this month, Raimondo acknowledged the recent positive developments, such as a $20 billion investment from Intel for a semiconductor factory in Ohio, but emphasized that the supply chain remains “fragile” and that the $52 billion of funding in the COMPETES Act is crucial to resolving the chip shortage.
|NSANY||NISSAN MOTOR CO. LTD.||10.57||+0.10||+0.96%|
Gupta pointed out that the automotive industry has experienced “many ups and downs,” but stressed that “we are agile and resilient to adjust to any kind of situation.”
He also noted that demand for vehicles “is increasing week over week and month on month.”
SONY SLASHES PS5 SALES FORECASE DUE TO CHIP SHORTAGE, SUPPLY CHAIN DISRUPTIONS
“So I don’t see any headwinds coming on the demand side, but on the other side, the headwind on the supply will continue and we have to make sure that we are closing the gap as we move forward,” he continued.
Gupta provided the insight on Thursday as he unveiled, first on FOX Business, the company’s plans to invest $500 million to convert its assembly plant near Canton, Miss. into an electric vehicle production facility.
In a news release, Gupta noted that Thursday’s announcement “is the first of several new investments that will drive the EV revolution in the United States.”
The company noted that its investment is supported by “strong partnerships” with state and local governments.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Nissan plans to build two new Nissan and Infiniti EV models starting in 2025 as part of the automaker’s $18 billion program to expand its fleet through 2030, the company announced on Thursday in a news release. The investment supports the retraining of employees and the addition of 2,000 jobs, the company noted.
“Now our focus is how we maximize our resources for the future growth,” Gupta told Bartiromo.
He stressed that the focus of the new technology is not only high performance, but also cost-efficiency.
“We want to focus more on creating value through our engineering resources and the ten years of experience we have in electrified vehicles,” Gupta said.
CLICK HERE TO READ MORE ON FOX BUSINESS
FOX Business’ Lucas Manfredi contributed to this report.