In what was an otherwise positive earnings report from General Motors, investors only seemed to care about one thing — the global chip shortage.
After warning shareholders of a potential $2 billion blowback, thanks to a supply bottleneck in the semiconductor manufacturing process, GM's stock took a tumble, closing about 2 percent lower on Wednesday.
"Right now, the issue that we're facing today is an industry-wide issue," Mary Barra, CEO, and chairman of General Motors ($GM), told Cheddar before the opening bell on Wednesday. "We're working with our suppliers — not only our tier-one but tier two, tier three, tier four — to address this issue and really optimize the number of chips and modules that we'll have to produce vehicles this year."
In the meantime, Taiwan Semiconductor Manufacturing Company (TSMC), where most of the world's chips originate, is scrambling to meet demand. According to analytics firm IHS Markit, 70 percent of the most advanced chips are assured by TSMC. This means that fabless chip makers like Nvidia and AMD are running into the same problem since both of them source vital silicon wafers from TSMC.
As GM and other automakers have been forced to shut down manufacturing plants, Barra says all the company can do is prioritize the best sellers.
"We're focused on our vehicles that are most in-demand by our customers — full-size trucks, the Corvette, and our EV products, as well as our full-size SUV," Barra said, insisting the bottleneck is a short-term problem.
"We're working to change our process as we go forward and have much deeper conversations within the supply chain to make sure this never happens again."
Barra would prefer investors focus on the future of General Motors.
After undergoing a rebranding of its logo to accompany a star-studded Super Bowl ad, GM has released a slew of commitments that highlight their vision of a world with zero emissions, zero crashes, and zero congestion. This includes offering 30 new all-electric vehicles by 2025.
"We want to make sure that we have an EV for everyone, and so that's the mission that we're on," Barra said. "The Super Bowl ad, which was a lot of fun, was just raising awareness of EVs and the importance of EVs as we go forward."
Barra also revealed to Cheddar that GM is currently engaged in talks with the Biden administration to help strategize an expansion of EV charging stations around the U.S. GM's fleet of more than 20 million connected cars will help the new administration map out the best areas to deploy clean energy stations.
"It's not only the quantity, but it's making sure we have them in the right place," Barra said. "We can leverage the information we have from OnStar... to indicate where they should be."
Updated February 11, 2021 at 9:54 am ET to edit headline.