More Than 50% Of Car Launches Have Been Delayed Since 2019

More Than 50% Of Car Launches Have Been Delayed Since 2019

And it’s not just because of the pandemic.

PWC published a study regarding automotive launch delays over the last seven years (2017 to 2023), and the results show that for the last five years, manufacturers have missed the start of production by 50% or more. PWC defines a delay as any date beyond the actual start of production (SOP) date. A good example is the Buick Envista, which has been delayed more than once. These delays are not just for new cars but also for facelifts and platform changes.

As you can see in the graph below, only 13% of launches were delayed in 2017. For the rest of the years going forward, we’re counting production delays and delays due to other factors. A total of 23% were delayed in 2018, and in 2019, the automotive industry missed its target by 50%. In 2020, the pandemic hit, leading to a production delay of 69%. Things appeared to get better in 2021 with a 57% delay, but in 2022, the industry missed targets by 69% again. This year, only 55% of vehicles were launched on time.

PWC also disclosed the main culprits behind production delays, and a grand total of zero people will be surprised at what they are. We have the infamous supply chain issues (not just semiconductor chips, but several other bits and pieces), meeting the standards of quality demanded by the public, and workforce constraints, leading to problems in scaling up production. Electric vehicle components were explicitly named as a big issue.

The delays due to “other” factors include portfolio changes. Traditionally, changing a production line from one model to the next is an easy process that manufacturers are well versed in. But the switch over to electric cars brings all sorts of new issues, as we saw with the Ford F-150 Lightning. It’s based on the same platform as an ICE F-150; still, there were delays.

Another issue was launch timing. All cars scheduled to be launched in 2020 had to be moved back because factories were shut. Finally, we have changing customer preferences and expectations.

In monetary terms, a 12-month delay can cost a manufacturer up to $200 million. In 2023 alone, several cars were delayed for the reasons mentioned above.

Examples include the Chevrolet Equinox, the Mazda CX-70, and the Corvette Z06. Chevrolet will likely feel it the hardest because its highly anticipated Silverado EV has been delayed by a year.

“Across the North American automotive industry, delayed launches could translate into losses of 2% to 7% of the industry’s total value, or $30 billion to $50 billion a year,” the report states.

The list of non-financial implications is possibly even worse. You obviously have reputational damage, but not just between the automaker and the customer. A delay could also impact third-party supplier deals automakers have in place. If Chevrolet can’t get its electric truck out, the suppliers of its infotainment systems, tires, windscreen wipers, etc., are also delayed. This has a domino effect on the entire industry.

It also leads to low employee morale, quality and warranty concerns, and the risk of technology becoming obsolete. We could see this with the Mazda MX-30 arriving to the party late with an inferior range compared to its rivals. This killed the tiny EV within just over a year.

The biggest threat is a loss of competitive advantage, leading to a loss in market share. Here, we can use the Equinox EV as an example. The Equinox was delayed due to the recent UAW strike, so Chevy could no longer afford to sell it for the promised $30,000. Chevrolet made a big deal about launching the car at such a low price, but now it has egg on its face. This did massive reputational damage and gave rivals like Tesla and its updated Model 3 a chance to catch up. In short, people are willing to wait for an expensive and relatively rare customized car like the Bentley Continental GT or a Porsche 911 GT3, but they’re not going to wait for something as pedestrian as a small electric SUV.

According to PWC, the number of new EV models is expected to double between now and 2026. The expected delay is between 20% and 40% in the coming years, assuming automakers continue to struggle with all the issues highlighted in this article.