Enlarge / A VW employee assembles the ID.3 electric car at VW’s Dresden plant in 2021.
Any hope that supply chain shortages in the automotive industry will ease seems to have been completely shattered this week. In Europe, Russia’s invasion of Ukraine forced BMW and Volkswagen to halt production at a number of their plants. And the outbreak of COVID-19 in China has led to the closure of factories owned by Toyota, VW, and now Tesla.
VW suffered one of the first. At the end of February, the company announced that it was stopping production for four days at its plant in Zwickau, Germany, where the ID.4 electric crossover is being built. VW also announced a three-day stoppage of production at its Dresden plant.
By early March, a leaked internal memo from Porsche revealed that the automaker had also been affected and that production of all Porsche models would be delayed as a result.
BMW also had problems and closed the Munich and Dingolfing plants in Germany, as well as the Mini plant in Oxford, England. Main problem? Wiring harnesses.
“If you look at Ukraine, this wiring harness industry employs roughly 20,000 people,” said Frank Weber, BMW board member for development, during a roundtable on Wednesday. “For BMWs, these are typically smaller wiring harnesses, such as engine transmission wiring harnesses,” Weber explained. Only one model uses a “full wiring harness”. [made] in Ukraine.”
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“So we don’t just want to take work there,” Weber continued. “We have duplicate machines to help us build these wire harnesses now. [in Germany]. And then we work with suppliers in specific locations that they had outside of Ukraine where they have capacity and we were able to come up with backup plans very quickly. And, therefore, we were able to announce now that next week we are going to resume all our work, but this [a] sad situation, as you can imagine.”
COVID is not over yet
Unfortunately for anyone who wants to buy a new car without a significant markup, the war in Ukraine is not the only major supply chain problem in the industry.
First, the shortage of chips caused by the COVID-19 pandemic is still relevant. Ford, for example, is now at the stage where it says it will ship Explorer SUVs without rear-seat climate control. However, the automaker is offering to ship the missing parts as soon as they become available to the nearest dealer, who will be able to install them at some point during the year.
But the virus itself hasn’t finished disrupting production, especially in China. Both Toyota and VW were forced to close production – in January at factories in Tianjin, and then again in Changchun in March. And the Shenzhen outbreak has slowed BYD’s battery production as Chinese authorities enforce lockdowns.
Even Tesla got hurt. In 2020, the automaker announced it was moving its headquarters to Texas after CEO Elon Musk was outraged by the imposition of public health anti-pandemic measures on his employees in California. However, the Twitter-loving CEO has apparently kept his cool with Chinese authorities despite Tesla’s Shanghai factory being forced to close for two days due to the virus, according to Reuters.