In recent months, the United States has faced a shortage of new cars, caused by a shortage of computer chips. 

   Describing the car market as “insane,” The New York Times shared that new cars are being sold “before they hit the lot.” American car manufacturer Toyota has cut their vehicle production by 40 percent. 

   “Toyota is experiencing additional shortages that will affect production at most of our North American plants,” the car company said in a statement. They cited COVID-19 and “unexpected events with our supply chain” as their reasoning. Toyota is projected to release 80,000 fewer cars in September. 

   With the decreasing amount of new car production, the prices of used cars have been high. Some used cars now cost as much as, if not more than, a new car. Carvana CEO Ernie Garcia stated that the increased used car prices will remain until manufacturers produce new cars at the rates before the COVID-19 pandemic hit.  

   American car manufacturer Ford claims to have lost an estimated 700,000 vehicles from April to June 2021, according to CNBC. Although the company faced a high loss, their supply amounts had improved since the last quarter. 

   Electric car company Tesla also experienced the chip shortage. Tesla CEO Elon Musk revealed that his company managed to “rewrite the software” to survive the supply shortage.  

   “We were able to substitute alternative chips and then write the firmware in a matter of weeks.” Musk elaborated. 

   The chip shortage has also led to a problem among rental cars. According to the Los Angeles Times, the chip shortage has made customers at rental car companies wait in longer lines and pay higher prices for lower quality cars. 

   Currently, the car shortage and rental car issues are not set to die down until 2022. Car companies are holding onto their cars for longer, or working to buy back cars that they had previously sold off.  

   Low employment has also contributed to the shortage, with rental car companies having less staff to buy new cars. 

   The chip shortage is set to cost automobile manufacturers an estimated $110 billion in revenue loss, according to AlixPartners.