GM, among other automakers, has circumnavigated the microchip shortage by building partially-finished examples of vehicles. This allows GM to keep production lines rolling and get the vehicles into customer hands as soon as the materials needed are secured. At its height, GM had a 95,000 backlog of vehicles waiting to be finished, and now, the Detroit-based automaker has less than 25,000 vehicles left waiting. For comparison, Ford has about 40,000 unfinished vehicles to clear out.
According to a report from Automotive News, GM and Ford expect to clear the backlogs of vehicles before the end of the year. GM’s expectation was reflected in its financial results from Q3 2022, with net income rising 37 percent from Q3 2021 to $3.3 billion.
“Chips are getting better, certainly, than they were a year ago,” said GM CFO Paul Jacobson. He went on to elaborate that GM is still building some vehicles without certain parts, but not at the volume seen earlier.
Despite the strong financial report, GM has revised its expectations for the production of EVs, saying that it will manufacture less towards the end of the year than originally anticipated. GM CEO Mary Barra citied some growing pains at the new Ultium Cells plant in Warren, Ohio.
As a reminder, the microchip shortage, as well as labor and other shortages, severely handicapped GMs ability to produce enough vehicles to meet demand. In an attempt to keep production lines moving, GM opted to manufacture vehicles without some key materials, and store them for later installation. Just last July, GM had 95,000 vehicles in storage lots, representing a significant financial draw on the company. Since, then GM has been making progress, as it was able to finish 20,000 of these partially-finished vehicles by August, and continues to make headway.