A chip shortage will cost the global car sector $210 billion in 2021.

This year, The car industry is forecast to lose $210 billion in sales due to a scarcity of semiconductor chips, consulting firm AlixPartners said. The new prognosis roughly doubles the May projections of the New York-based business. Semiconductor chips, which power amenities range from entertainment systems to power steering and brakes, are vital in new automobiles. The White House is meeting with companies to discuss ways to alleviate the shortage of semiconductor chips for cars. The drought dates back to last year when Covid caused rolling shutdowns of vehicle assembly plants.

Stellantis CEO Carlos Tavares says the company isn't ruling out ways suppliers repaid for the problem. Companies' primary focus right now is "mitigating the short-term impacts of this disruption."

The group said it's now forecasting that 7.7 million production units will be lost in 2021, up from 3.9 million units in May. The global automotive industry is a highly complex system of retailers, automakers and suppliers. Much of the issue starts at the bottom of the supply chain, with wafers. The wafers are combined with semiconductors to form a chip then installed in steering, braking, and infotainment systems modules.

As the plants shut down, wafer and chip suppliers moved the components to other industries, such as consumer electronics, which were not likely to be impacted by stay-at-home orders.

In a statement, Dan Hearsch, a managing director in AlixPartners' automotive and industrial group, said, "As a result, this is a serious issue for the industry."

Hearsch stated that the biggest issue for businesses right now is "mitigating the short-term impacts as much as they can out of this disturbance," which may entail everything from renegotiating contracts to managing the expectations of lenders and investors.