Just like a ghost from the not-too-distant Covid past, the shortage of semiconductors is still plaguing the UK motor industry.

After the global lockdowns, the semiconductor crisis threatened all types of electrical goods across the globe, and car manufacturers were particularly hard hit.]

It was thought that stocks had returned to sensible levels of supply, but it appears that stocks never fully recovered.

Spiders web

Britain’s motor industry is still grappling with the global semiconductor shortage, as carmakers warn that ongoing disruptions in chip supply are hindering manufacturing output and slowing the country’s post-pandemic recovery.

Semiconductors, the tiny but vital components that power everything from engine management systems to infotainment screens and safety sensors, have become a critical bottleneck for automakers worldwide.

Despite hopes that supply would normalise by 2024, the crisis is persisting well into 2025, driven by surging global demand, geopolitical tensions, and limited manufacturing capacity.

According to the Society of Motor Manufacturers and Traders (SMMT), UK car production fell by 4% in the third quarter of 2025, as several plants were forced to temporarily suspend or scale back output due to ongoing chip shortages.

The problem is especially acute in the production of electric and hybrid vehicles, which require significantly more semiconductors than conventional petrol or diesel models.

Haunting recovery

Mike Hawes, chief executive of the SMMT, stated that while demand for new vehicles remains strong, the ongoing shortage of semiconductors continues to constrain production and delay deliveries.

“Semiconductor shortages remain one of the biggest obstacles to a full recovery for UK automotive manufacturing,” Hawes said. “Carmakers are facing stop-start production schedules, delayed model launches, and extended waiting times for customers. Until global supply stabilises, the industry will continue to feel the strain.”

The SMMT estimates that the UK has lost more than 200,000 vehicles in potential production since the start of 2021 due to chip-related disruptions, resulting in billions of pounds in lost output for the industry.

Carmakers, including Jaguar Land Rover, Mini, and Nissan, have all experienced production delays over the past year, as component shortages ripple through global supply chains. In some cases, vehicles have been built without certain electronic features, which can be retrofitted later once the necessary parts become available.

A global horror story

The semiconductor crunch stems from a perfect storm of factors: pandemic-era production shutdowns, booming demand for consumer electronics, and limited investment in new chip fabrication plants.

Geopolitical tensions between the US and China, coupled with export restrictions on high-tech materials, have further disrupted supply.

Although global chip production is gradually expanding, with major new factories being built in Europe and the US, analysts warn that the automotive sector will remain vulnerable for at least another year.

Professor David Bailey, automotive industry expert at the University of Birmingham, said the crisis highlights the risks of globalised supply chains that rely heavily on a handful of Asian manufacturers.

“The UK and Europe have become overdependent on overseas semiconductor production,” Bailey said. “To secure the future of the car industry, we need greater resilience and domestic capacity. The push for electric vehicles makes that even more urgent.”

Shocking pressures

The transition to electric mobility is intensifying demand for semiconductors, as EVs can require up to ten times more chips than traditional vehicles.

Every component, from battery management systems to driver-assistance sensors, depends on advanced electronics.

While the Government’s Automotive Transformation Fund is supporting battery and component production, industry leaders argue that chip manufacturing should also be part of Britain’s industrial strategy.

Stellantis UK managing director Paul Willcox recently warned that the lack of semiconductor resilience could “undermine the UK’s ambitions to become a global hub for electric vehicle manufacturing.”

Ghosts in the machine

For drivers, the shortage means longer waiting times and fewer choices.

Dealers report delays of up to nine months for some models, while second-hand prices remain inflated due to limited new car availability.

Despite these challenges, experts remain optimistic that supply will improve by 2026 as new chip fabrication plants come online and automotive supply chains adapt.

However, until then, the industry faces an uncomfortable reality: the global semiconductor shortage, once seen as a temporary disruption, has become a defining test of resilience for Britain’s carmakers.