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Electric vehicle push will ‘elevate’ chipmakers: Truist chief executive

Electric vehicle push will 'elevate' chipmakers: Truist chief executive

Like more automakers to commit to phase out their production of combustion engine vehicles over the next few decades, the shortage of microchips becomes a bottleneck for the electric vehicle (EV) transition. Truist Titles (TFC) Chief Executive William Stein, however, believes that the push for electric vehicles will ultimately help increase chipmaking capacity in the long term.

“Good, [the shift towards EV adoption is] a significant potential change for chipmakers,” Stein says Yahoo Finance Live. “There is approximately double the semiconductor content in a typical electric vehicle compared to a traditional internal combustion engine. It’s a significant improvement – sort of a shift from major vendors – but a big increase in semi-content.

Stein joined Yahoo Finance Live to discuss the importance of electric vehicle-focused chipmakers. Amid soaring gas prices in the United States caused by the Russian-Ukrainian war and the resulting bans on Russian oil, interest in online research for electric vehicles has reached record levels.

Alongside foreign and domestic automakers, governments are passing laws to catalyze the adoption of electric vehicles – Canada recently announced that it will be place a ban on combustion engine passenger car sales by 2035. Canada joined the UK by promising to halt sales of gas-powered vehicles within a similar time frame.

FILE – A 2021 Audi e-tron is displayed with a 2021 Polestar electric sedan at the Denver Auto Show Friday, Sept. 17, 2021, at Elitch Gardens in downtown Denver. (AP Photo/David Zalubowski)

Bottlenecks in electric vehicle manufacturing also arise from the perspective of battery production, as reports suggest President Joe Biden is considering invoke the Defense Production Act to accelerate the production of critical materials for electric vehicle batteries. The move could target minerals such as lithium, cobalt and nickel, as well as provide key companies with funds to increase production.

Stein said chipmakers are preparing to ramp up production capacity in the medium to long term despite the current supply shortage to support automakers’ updated electric vehicle market penetration goals. He noted that automakers are becoming increasingly aggressive in terms of the percentage of their fleets they intend to make fully electric as well as the timeline in which they plan to achieve those goals.

“So we think the penetration is about 3% of global automotive production today. It’s relatively modest,” he said. “About a year ago it was expected to be, by 2040, maybe 40%, 50% penetration. , but perhaps even more than that, targets set by automakers.

The parallel expansion in the adoption of electric vehicles has also been the push towards self-driving technology. However, Stein said the growth prospects for the market for self-driving vehicles and their capabilities appear to be more “incrementalistic” than those for electric vehicles.

” We’re gonna succed [safer autonomous driving with] every year and every model and every release of new technology,” he said. “And eventually, maybe we’ll get to a point where we have self-driving [be the norm]. This approach has proven to be the most prevalent among OEMs today, OEMs, car manufacturers.

Thomas Hum is a staff writer at Yahoo Finance. Follow him on Twitter @thomashumTV

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