The chip shortage has led automakers around the world to cut production of vehicles, but has also boosted profits as vehicle prices have risen. Automakers use chips in everything from brake sensors and power steering to entertainment systems.

Volkswagen AG’s top executive for the Americas said on Tuesday that the global semiconductor chip shortage will continue until next year.

“Without a doubt, this shortage will continue until 2022, at least in the second half of 22,” Scott Keogh, chief executive of Volkswagen Group of America, told the Reuters Events Automotive Summit.

The chip shortage has led automakers around the world to cut production of vehicles, but has also boosted profits as vehicle prices have risen. Automakers use chips in everything from brake sensors and power steering to entertainment systems.

Keogh added that while the problem may subside in the fourth quarter of this year, the industry still cannot meet market demand for vehicles.

He said a likely change in the near future is that automakers will try to reduce the number of chips needed in each part of cars and trucks.

“Historically, we’ve made decisions like the chips are almost endless, so every module requires a chip, every window regulator, every modulator,” he said. “There are ways we start looking at it when we are developing the cars, can we do more modules with less chips? It can be done. These are all things we are looking at.”

Regarding discussions that the U.S. government should simply fund the construction of additional chip factories, Keogh said it would take billions of dollars and at least four years to do so. “I don’t know if picking up a phone from the government is the solution to the chip shortage.”

While chips are the current challenge, the next will be the growing demand for electric vehicles and the batteries needed to power them, Keogh said.

While the VW plant in Chattanooga, Tennessee will get its batteries from SK Innovation’s Georgia plant, the German automaker will have additional battery announcements when it begins rolling out the next wave of electric vehicles, did he declare.

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