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    Ford Splits Into Electric and Gas Divisions to Speed Up Transition

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    E.V. operations will focus on technology and growth while the traditional business continues to chase profits. “You can’t have people work on both at the same time,” the chief executive said.Ford Motor has decided the best way to make the transition to electric vehicles is to transform itself first.On Wednesday, the automaker said it had reorganized its auto operations into two distinct businesses — one that makes its gasoline-powered vehicles and focuses on maximizing profits and another that develops and ramps up production of electric models and aims for rapid growth.Ford’s chief executive, Jim Farley, said in an interview that the two businesses required different skills and mind-sets that would clash and hinder each area if they remained parts of one organization. “You can’t be successful and beat Tesla that way,” he said.Sales of battery-powered cars are rising rapidly, a trend that Mr. Farley and other auto executives see as the industry’s biggest disruption since Henry Ford introduced mass production and the Model T in 1908. Ford, General Motors, Toyota, Volkswagen and other traditional manufacturers are spending tens of billions of dollars to field new models, build battery plants and develop new technologies that Tesla has pioneered, such as advanced driver-assist systems and over-the-air software updates.Mr. Farley said Ford would spend $50 billion on electric vehicles between 2022 and 2026. It previously planned to spend $30 billion in the five years ending in 2025. It plans to spend $5 billion on E.V.s this year, double the 2021 total.A Critical Year for Electric VehiclesThe popularity of battery-powered cars is soaring worldwide, even as the overall auto market stagnates. Going Mainstream: In December, Europeans for the first time bought more electric cars than diesels, once the most popular option. Turning Point: Electric vehicles account for a small slice of the market, but in 2022, their march could become unstoppable. Here is why. Tesla’s Success: A superior command of technology and its own supply chain allowed the company to bypass an industrywide crisis. Rivian’s Troubles: Investors first embraced this electric vehicle maker. Now they worry it may not live up to its promise. Green Fleet: Amazon wants electric vans to make its deliveries. The problem? The auto industry barely produces any of the vehicles yet.This spring, Ford is supposed to start full production of an electric version of its F-150 pickup truck and has taken reservations for more than 150,000 of them. It is also building two battery plants in Kentucky, and a third battery plant and an electric truck factory in Tennessee.Separately on Wednesday, Stellantis outlined a long-term strategic plan that calls for rapid introductions of new electric vehicles. The company, which was formed a year ago from the merger of Fiat Chrysler and the French automaker Peugeot, said that it would introduce 25 E.V.s in the United States by 2030, and that all new models in Europe would be electric by that time. It plans to build two battery plants in the United States.G.M. has similar plans. It is building two battery plants, and aims to phase out internal-combustion models by 2035.Ford’s reorganization is one of the most sweeping taken by a traditional automaker in preparation for the transition to electric vehicles. Mr. Farley said the plan had come together after he and other top Ford executives noticed stark differences in the two business areas.In making gas-powered vehicles, Ford must focus on reducing costs and generating the profits it needs to fund its E.V. plans. Over the next four years, Ford aims to trim costs for its internal-combustion models by $3 billion, with some cuts coming through job reductions, Mr. Farley said.The electric business, in contrast, will have to spend heavily to develop software and technologies and to ramp up production quickly to achieve economies of scale. Ford aims to produce two million electric vehicles a year by 2026.“For Ford to win against the new players and the other manufacturers, we have to focus more than we do today,” Mr. Farley said. “You can’t have people work on both at the same time.”The E.V. group will be known as Ford Model e. Mr. Farley will serve as its president. Doug Field, a former Apple and Tesla executive hired by Ford in September, will lead its vehicle, software and digital systems development.The internal-combustion business, known as Ford Blue, will be led by Kumar Galhotra, who was president of Ford’s North American operations.Ford plans to begin breaking out the profits and losses of the two groups in 2023, and expects the electric business to become profitable within four years. Mr. Farley said the group would most likely have 2,000 to 5,000 employees. In addition to developing electric models, it will engineer new types of assembly lines to build them and manage Ford’s sourcing of key components like motors and inverters and raw materials such as lithium and rare earth metals.Mr. Farley said he envisioned the two groups working closely together. Ford Model e will use body engineering, stamping, and components like seats and steering systems that the internal-combustion group develops. The E.V. unit will produce software and digital components that will be incorporated into traditional gasoline vehicles made by Ford Blue.Mr. Farley said Ford had decided against spinning off the E.V. business because it would hinder the ability of the two groups to cooperate. “They would come to see each other as competitors, and the cooperation would stop,” he said. More

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    How The Trucker Protests Are Snarling the Auto Industry

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    Blockades of U.S.-Canada border crossings could hurt the auto industry, factory workers and the economy, which are still recovering from pandemic disruptions.After two years of the pandemic, semiconductor shortages and supply chain chaos, it seemed as if nothing else could go wrong for the auto industry and the millions of people it employs. But then came thousands of truckers who, angry about vaccine mandates, have been blocking major border crossings between Canada and the United States.With Canadian officials baffled about what to do, the main routes that handle the steel, aluminum and other parts that keep car factories running on both sides of the border were essentially shut down Wednesday and Thursday.Ford Motor, General Motors, Honda and Toyota have curtailed production at several factories in Michigan and Ontario, threatening paychecks and offering a fresh reminder of the fragility of global supply chains and of the deep interdependence of the U.S. and Canadian economies, which exchange $140 million in vehicles and parts every day.No one knows how this is going to end. The protests are expected to swell in the coming days and could spread, including to the United States. Canada’s transport minister has called the bridge blockades illegal. Marco Mendicino, Canada’s minister of public safety, said on Thursday that the Royal Canadian Mounted Police, the national force, was sending additional officers to the Canadian capital, Ottawa, and to Windsor, Ontario. The mayor of Windsor has threatened to remove the protesters. But those statements have seemed to have little impact. Gov. Gretchen Whitmer of Michigan pleaded with Canadian officials to quickly reopen traffic.“They must take all necessary and appropriate steps to immediately and safely reopen traffic so we can continue growing our economy,” Ms. Whitmer said in a statement on Thursday.The chaos is already starting to take an economic toll. The pain is likely to be most acute for smaller auto parts suppliers, for independent truckers and for workers who get paid based on their production. Many of these groups, unlike large automakers like G.M., Ford and Toyota, lack the clout to raise prices of their goods and services. Companies and workers in Canada are more likely to suffer because they are more dependent on the United States.The longer crossings between the countries remain blocked, the more severe the damage, not only to the auto industry but also to the communities that depend on manufacturing salaries. Workers at smaller firms typically receive no compensation for lost hours, said Dino Chiodo, the director of auto at the giant Canadian union Unifor. Workers who have been sent home early because of parts shortages will spend less at stores and restaurants.“People say, ‘I have $200 less this week, what do I do?’” Mr. Chiodo said. “It affects the Canadian and U.S. economy as a whole.”Auto factories and suppliers in the United States generally keep at least two weeks of raw materials on hand, said Carla Bailo, the president of the Center for Automotive Research in Ann Arbor, Mich. If the bridges remain blocked for longer than that, she said, “then you’re looking at layoffs.”The blockades came after a demonstration in Ottawa that started nearly two weeks ago. The protests began over a mandate that truck drivers coming from the United States be vaccinated against the coronavirus and have grown to include various pandemic restrictions. Some have demanded that Prime Minister Justin Trudeau resign. The truckers have been joined by various groups, including some displaying Nazi symbols and damaging public monuments. Police in Ottawa said on Thursday that the protesters and their supporters, including some in the United States, had almost overwhelmed the city’s 911 system with calls.The crossing that has the auto industry and government officials most concerned is the Ambassador Bridge, which connects Windsor and Detroit. It carries roughly a quarter of the trade between the two countries, which has been relatively unrestricted for decades. While food and other products are also affected, about a third of the cargo that uses the bridge is related to the auto industry, Ms. Bailo said.The blockade has been felt as far south as Kentucky, where production has been disrupted at a Toyota factory, the company said on Thursday. The shutdown at the border also will prevent manufacturing at Toyota’s three Canadian plants for the rest of the week, a spokesman for the automaker, Scott Vazin, said.Demonstrators blocking access to the Ambassador Bridge in Windsor. The bridge accounts for roughly a quarter of the trade between the United States and Canada.Nathan Denette/The Canadian Press, via Associated PressG.M. said it had canceled two shifts on Wednesday and Thursday at a factory in Lansing, Mich., that makes Buick Enclave and Chevrolet Traverse sport utility vehicles. The company also sent workers from the first shift at a plant in Flint, Mich., home early. Ford said Thursday that plants in Windsor and Oakville, also in Ontario, were running at reduced capacity.Shortages of semiconductors and other components have not been all bad for giant automakers, creating scarcity that has driven up prices of cars in the last year. Ford and G.M. both reported healthy profits for 2021. And the economic damage will not be severe if the bridge and other crossings reopen soon, industry experts said.But the last two years have shown that, because supply chains are so complex, problems at obscure parts makers can have far-reaching and unpredictable impact. Last year, Ford had to shut down plants for weeks at a time in part because of a fire at a chip factory in Japan.“If it stretches on for weeks it could be catastrophic,” said Peter Nagle, an analyst who covers the car industry at IHS Markit, a research firm.Mr. Nagle said the bridge blockade was worse than the semiconductor shortage for carmakers. They “were already running pretty tight because of other supply chain shortages,” he said. “This is just bad news on top of bad news.”The auto industry operates relatively seamlessly across Canada, the United States and Mexico. Some parts can travel back and forth across borders multiple times as raw materials are processed and are turned into components and, eventually, vehicles.An engine block, for example, might be cast in Canada, sent to Michigan to be machined for pistons, then sent back to Canada for assembly into a finished motor. The blockades have stranded some truckers on the wrong side of the border, creating a chain reaction of missed deliveries.The slowdown in Canadian trade will disproportionately affect New York, Michigan and Ohio, said Arthur Wheaton, the director of labor studies at Cornell’s School of Industrial and Labor Relations. At the same time, he added, the protests were “certainly raising concerns for all U.S. manufacturers.”“There is already a shortage of truck drivers in North America, so protests keeping truckers off their routes exacerbates problems for an already fragile supply chain,” Mr. Wheaton said.Carmakers had hoped that shortages of computer chips and other components would ease this year, allowing them to concentrate on the long-term: the transition to electric vehicles.A larger fear for many elected officials and business executives is that the scene at the Ambassador Bridge could inspire other protests. The Department of Homeland Security warned in an internal memo that a convoy of protesting truckers was planning to travel from California to Washington, D.C., potentially disrupting the Super Bowl and President Biden’s State of the Union address on March 1.“While there are currently no indications of planned violence,” the memo, which was dated Tuesday, said, “if hundreds of trucks converge in a major metropolitan city, the potential exists to severely disrupt transportation, federal government operations, commercial facilities and emergency services through gridlock and potential counter protests.”Mr. Chiodo, the Canadian union leader, said that “the people who are demonstrating are doing it for the wrong reasons. They want to get back to the way things were before the pandemic, and in reality they are shutting things down.”The scene in Ottawa remained a raucous party Thursday, with hundreds of people on the street, many wearing Canadian flags like capes. The song “Life Is a Highway,” by the Canadian musician Tom Cochrane, pumped from loudspeakers set up on the back of an empty trailer that had been converted into a stage.But there was a thinning out of protesters — with some empty spaces where trucks had been the day before.Johnny Neufeld, 39, a long-haul trucker from Windsor, Ontario, said the vaccine mandate would spell the end of his job transporting molds into the United States since he had chosen not to be inoculated out of fear the shots had been developed too quickly. He got his first ticket from the police Thursday morning, a fine of 130 Canadian dollars (about $100) for being in a no-stopping zone.“This is a souvenir,” he said.Dan Bilefsky More

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    G.M. Cancels Shifts at Michigan Plant Over Canada Protest Disruption

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    General Motors is the latest automaker to suspend production because of protests at a crucial Canadian border crossing that have disrupted supply chains already in turmoil because of the pandemic.G.M. said it had canceled two shifts on Wednesday and Thursday at a factory in Lansing, Mich., that makes sport utility vehicles. The plant depends on components that normally travel across a bridge between Windsor, Ontario, and Detroit that was closed by truck drivers and far-right groups angry about vaccine mandates and demanding the resignation of Prime Minister Justin Trudeau.Ford Motor and Toyota have also shut down some operations because factories could not get parts manufactured in Canada.The shutdown at the border will prevent manufacturing at Toyota’s three Canadian plants for the rest of this week, Scott Vazin, a spokesman for Toyota Motor North America, said Thursday.As long as the shutdowns are short lived, the impact on automaker sales and worker livelihoods should be limited. Companies are likely to make up for any lost production by running extra shifts or other measures.“A couple of days shouldn’t be that significant,” Mr. Vazin said. “We’re certainly hoping the blockade ends.”Said Deep, a spokesman at Ford, said Thursday morning that the company was running its plants in Oakville and Windsor, both in Ontario, at reduced capacity.“This interruption on the Detroit-Windsor bridge hurts customers, autoworkers, suppliers, communities and companies on both sides of the border that are already two years into parts shortages resulting from the global semiconductor issue, Covid and more,” Mr. Deep said. “We hope this situation is resolved quickly because it could have widespread impact on all automakers in the U.S. and Canada.”John Bordignon, a spokesman for Honda Canada, said Thursday morning that the company’s plant in Alliston, Ontario, had temporarily suspended one production line Wednesday evening but was back online on Thursday.The company will continue to monitor the flow of goods between Canada and the United States, and further disruptions were “certainly possible,” he said.Protesters challenging Canada’s vaccine requirements and other pandemic restrictions began cutting off traffic Monday on the Ambassador Bridge, the vital span that connects Detroit and Windsor.The bridge accounts for roughly a quarter of the trade between the United States and Canada. Trucks carry an estimated $300 million worth of goods across the bridge each day, about a third of which are related to the automobile industry.Companies have begun rerouting shipments to alternative crossing routes, like the Blue Water Bridge, which links Port Huron, Mich., and Sarnia, Ontario. But a new blockade on Wednesday on a route to that bridge, as well as a surge of diverted cars and trucks, slowed traffic there.The closings are likely to lead to losses for other industries, as well. On Wednesday, Jen Psaki, the White House press secretary, said that the Biden administration was tracking potential disruptions to agricultural exports to Canada.Gretchen Whitmer, the governor of Michigan, said in a statement on Thursday that the blockade was putting the state’s economy at risk.“The blockade is having a significant impact on Michigan’s working families who are just trying to do their jobs,” she said. “Our communities and automotive, manufacturing, and agriculture businesses are feeling the effects.”Carmakers worldwide have struggled with shortages of semiconductors and other parts that severely curtailed production and sales. They had hoped that the flow of components and materials would start to return to normal this year.Ford said last Friday that it would be forced to shut down some production lines and reduce work hours at plants across North America this week because of chip shortages.Most carmakers operate on a “just-in-time” system that dispatches parts and materials to their factories as they are needed. The system has helped manufacturers reduce costs.But it has also left companies vulnerable as the pandemic closed foreign ports and factories and overloaded shipping companies, warehouses and truckers.David C. Adams, the president at Global Automakers of Canada, which represents Toyota and Honda, said auto facilities typically had about two days of inventory on hand. “Then things start to become problematic in terms of having enough parts to keep the lines running.” More

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    Toyota Topped G.M. in U.S. Car Sales in 2021

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    After struggling to produce cars because of a global computer chip shortage, automakers are trying to move quickly to making electric vehicles.Toyota Motor unseated General Motors as the top-selling automaker in the United States last year, becoming the first manufacturer based outside the country to achieve that feat in the industry’s nearly 120-year history.That milestone underlines the changes shaking automakers, which face strong competition and external forces as they move into electric vehicles. And it came in a tumultuous and strange year in which automakers contended with an accelerating shift to electric vehicles and struggled with profound manufacturing challenges. New car sales have been damped by a severe shortage of computer chips that forced automakers to idle plants even though demand for cars has been incredibly robust.G.M., Ford Motor and Stellantis, the automaker created by the merger of Fiat Chrysler and Peugeot, produced and sold fewer cars than they had hoped to in 2021 because they were hit hard by the chip shortage. Toyota was not hurt as much.In addition to that shortage, the coronavirus pandemic and related supply-chain problems depressed sales while driving up the prices of new and used cars, sometimes to dizzying heights. Auto manufacturers sold just under 15 million new vehicles in 2021, according to estimates by Cox Automotive, which tracks the industry. That is 2.5 percent more than in 2020 but well short of the 17 million vehicles the industry usually sold in a year before the pandemic took hold.G.M. said on Tuesday that its U.S. sales slumped 13 percent in 2021, to 2.2 million trucks and cars. Toyota had access to more chips because it set aside larger stockpiles of parts after an earthquake and tsunami in Japan knocked out production of several key components in 2011. Its 2021 sales rose more than 10 percent, to 2.3 million.“The dominance of the U.S. automakers of the U.S. market is just over,” said Erik Gordon, a business professor at the University of Michigan who follows the auto industry. “Toyota might not beat G.M. again this year, but the fact that they did it is symbolic of how the industry changed. No U.S. automaker can think of themselves as entitled to market share just because they’re American.”Ford is expected to finish third when the company releases sales data on Wednesday.The shortage of chips stems from the beginning of the pandemic, when auto plants around the world closed to prevent the spread of the coronavirus. At the same time, sales of computers and other consumer electronics took off. When automakers resumed production, they found fewer chips available to them.Despite weak new-vehicle sales, automakers and dealers alike have been ringing up hefty profits because they have been able to raise prices.“Sales volumes are down but our margins are up and expenses are down,” said Rick Ricart, whose family owns Ford, Hyundai, Kia and other dealerships around Columbus, Ohio. “We barely had any inventory cost now. Cars arrive on the truck and they’re already sold. They’re gone within 24 to 48 hours.”Automakers are also contending with the transition to electric cars and trucks. Many companies are spending tens of billions of dollars designing battery-powered models and building plants to produce them. They are racing to catch up to Tesla, which sells a large majority of electric vehicles now.But most established automakers are unlikely to gain ground in U.S. electric vehicle sales this year because they are not in a position to produce many tens of thousands of such cars for at least another year or two.And Tesla, which was founded in 2003, is not standing still. After reporting a nearly 90 percent jump in global sales last year, to just shy of one million, the company plans to start mass production at two new factories this year, near Austin, Texas, and Berlin. It has been less affected by the chip shortage because it was able to switch to types of chips that are more readily available.The electric-car maker does not break out sales by country, but Cox Automotive estimated that it sold more than 330,000 in the United States, or roughly as many vehicles as Mercedes-Benz and BMW each sold here.Ford is perhaps the only major automaker that could pose a serious competitive threat to Tesla this year. This spring, Ford plans to start selling an electric version of its F-150 pickup truck, the top-selling vehicle in the United States. The company has taken more than 200,000 reservations for that truck, the F-150 Lightning, and hopes to produce more than 50,000 this year. It is increasing production at a plant near Detroit to build 80,000 in 2023 and up to 150,000 in 2024.“The F-150 is the most important franchise in our company,” Kumar Galhotra, president of Ford’s Americas and international markets group, said in an interview. “The F-150 Lightning shows how serious our commitment is to the E.V. market.”Ford has been selling a popular electric sport-utility vehicle, the Mustang Mach E, for nearly a year. It said Tuesday that it aimed to increase production of the Mach E to 200,000 vehicles a year by 2023.Other automakers are planning to produce relatively modest numbers of electric cars this year because they and their suppliers are still gearing up to build factories and produce batteries and other components. G.M. has set a goal of producing only electric vehicles by 2035, and on Wednesday it will unveil a battery-powered Chevrolet Silverado pickup truck at the Consumer Electronics Show. But the electric Silverado isn’t expected to go into production until 2023.The Coronavirus Pandemic: Key Things to KnowCard 1 of 3The global surge. More

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    Supply Chain Problems Mean Buying a Car Sometimes Takes a Plane Ride

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    The limited supply of new and used vehicles is forcing some Americans to go to great lengths to find and buy them, including traveling to dealers hundreds of miles away.When Rachael Kasper started shopping for a new car in August, she had her heart set on a Ford Escape plug-in hybrid. The problem was that Ford hasn’t made many of them this year because of a computer chip shortage that has slowed auto production around the world.Ms. Kasper first came up empty in her home state of Michigan and, later, in neighboring states. When she expanded to the East Coast, she found one — at a dealership 537 miles away, in Hanover, Pa.“I flew to Baltimore, took a Lyft to the dealer, and then drove all the way home,” said Ms. Kasper, who owns a water-sports equipment retailer. “It was quite an adventure.”The shortage of computer chips, in large part caused by decisions made in the early days of the pandemic, has rippled through the auto industry this year. Manufacturers have had to close plants for lack of parts, leaving car dealers with millions fewer vehicles to sell.As a result, car buyers have had to travel hundreds of miles to find the vehicles they want, give up on haggling and accept higher prices, and even snap up used cars that have been repaired after serious accidents.The supply squeeze coincides with an apparent increase in demand. Some people are trying to avoid mass transit or taxis. Others simply want a vehicle. Many families have saved thousands of dollars thanks in part to government benefits and stimulus payments and because they have been spending less on travel, restaurant meals and other luxuries that have fallen by the wayside because of health concerns.The end of the year is normally a peak selling season, with some automakers running ads in which cars are presented as gifts complete with giant bows. But this year consumers are finding that locating the car of their desires is not quick, easy or cheap.As Ed Matovcik, a wine industry executive in Napa, Calif., neared the end of his lease on a Tesla Model S, he decided to switch to a Porsche Taycan, a German electric car. He ordered one, but it won’t arrive until May, three months after he has to give up the Tesla.He is planning on renting cars until the Taycan arrives and is looking on the bright side. “It’s a different world now, so I don’t really mind the wait,” he said. “I’m thinking of renting a pickup for a week so I can finally clear out my garage.”The disruption to car production has rippled through the automotive world. For a time in the spring and summer of 2020, rental car companies stopped buying new cars and sold many of their vehicles to survive while travel was restricted. Now those companies are seeking to take advantage of a hot rental market and are scrambling to buy cars, often competing with consumers and dealers.The big discounts and incentives that were once standard features of car-buying in the United States have all but disappeared. Instead, some dealers now add an extra $2,000 or $3,000 on top of the list price for new cars. That has left car buyers fuming, but the dealers who are jacking up prices know that if one customer balks, another is usually waiting and willing.In November, the average price of a new car was a record $45,872, up from $39,984 a year ago, according to Edmunds, an auto-data provider. The average price paid for a used car is now more than $29,000, up from $22,679 in 2020, and Edmunds expects it to exceed $30,000 next year for the first time ever.Because of the rising prices of used cars, some consumers are spending to fix up older vehicles and keep them going for longer. More cars that have been damaged in accidents are getting fixed instead of being declared a total loss by insurers and sent to the scrap yard.“The math has changed on whether a car is totaled,” said Peter DeLongchamps, a senior vice president at Group 1 Automotive, a Houston-based auto retailer that operates its own chain of auto-body shops. “Our parts and service business is very good. We’re seeing more cars getting fixed based on the high used values.”Workers assembled a Jeep Grand Cherokee L at a Stellantis plant in Detroit in June. A computer chip shortage has slowed auto production around the world.Bill Pugliano/Getty ImagesThe auto industry’s chip shortage stems from the start of the pandemic, in the spring of 2020, when automakers closed factories for weeks and cut orders for computer chips and other parts. At the same time, homebound consumers were snapping up laptops, game consoles and other electronics, spurring makers of those devices to increase orders for semiconductors. When automakers resumed production, they found chip suppliers had less production capacity for them.As a result, automakers have produced significantly fewer trucks and cars this year than they had planned. In addition to closing plants, they’ve built vehicles without certain features, such as heated seats and electronics that maximize fuel economy. Tesla dropped power lower-back support in the passenger seat of certain models.The Coronavirus Pandemic: Key Things to KnowCard 1 of 4The Omicron variant. More

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    The Car Market 'Is Insane': Dealers Can't Keep Up With Demand

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    Rick Ricart is expecting nearly 40 Kia Telluride sport utility vehicles to arrive at his family’s dealership near Columbus, Ohio, over the next three weeks. Most will be on his lot for just a few hours.“They’re all sold,” Mr. Ricart said. “Customers have either signed the papers or have a deposit on them. The market is insane right now.”In showrooms across the country, Americans are buying most makes and models almost as fast as they can be made or resold. The frenzy for new and used vehicles is being fed by two related forces: Automakers are struggling to increase production because of a shortage of computer chips caused in large part by the pandemic. And a strong economic recovery, low interest rates, high savings and government stimulus payments have boosted demand.The combination has left dealers and individuals struggling to get their hands on vehicles. Some dealers are calling and emailing former customers offering to buy back cars they sold a year or two earlier because demand for used vehicles is as strong as it is for new cars, if not stronger. Used car prices are up about 45 percent over the past year, according to government data published this week. New car and truck prices are up about 5 percent over the past year.Those price increases have fed a debate in Washington about whether President Biden’s policies, particularly the $1.9 trillion American Rescue Plan he signed in March, are responsible for the sharp rise in inflation. The government said this week that consumer prices across the economy rose 5.4 percent in the last year through June.Republican lawmakers have argued that the March legislation is overheating the economy and are citing the rise in prices to oppose additional government spending. But Biden administration officials have pointed out that temporary supply shortages are largely responsible for the surge in prices of cars and other goods.Government stimulus may have helped some consumers, but it is hard to say how much. Several large forces are at play.The chip shortage, for example, is affecting automakers all over the world and is not directly related to U.S. policies. Industry officials blame limited production capacity for semiconductors and pandemic-related disruptions in supply and demand for the shortage.To make the most of limited chip supplies, General Motors has temporarily done away with certain features in some models, like stop-start systems that automatically turn off engines when cars stop for, say, a traffic light. And the French carmaker Peugeot has replaced digital speedometers with analog ones in some cars.Rental car companies that sold off thousands of cars during the pandemic to survive are now in the market to buy cars and trucks. They want to take advantage of a summer travel boom that has driven up rental rates to several hundred dollars a day in some places.“The industry has had strikes and material shortages before that have left us short of inventory, but I’ve never seen anything like this,” said Mark Scarpelli, the owner of two Chevrolet dealerships near Chicago. “Never, never, never.”His dealerships normally have 600 to 700 cars in stock. Now, he has about 50. Once or twice a week, a truck arrives with five or 10 vehicles. The cars disappear quickly because of customer waiting lists, Mr. Scarpelli said.Industry executives said the last time demand and supply were this out of sync was most likely after the end of World War II, when U.S. auto plants returned to making cars after years of churning out tanks and planes.Dealers said virtually everything was selling, from luxury vehicles and sports cars that cost more than $100,000 to basic used cars that many parents buy for teenagers.Even though the unemployment rate is still higher than before the pandemic, many people have money to spend. Government payments have helped lots of people, but many Americans, kept from vacationing or eating out, saved money. Financing cars is also relatively cheap — at least for people with good credit. Some automakers like Toyota, which has been less affected by the chip shortage than others, are advertising zero-interest loans on some cars.Mr. Ricart’s family businesses include a custom shop that sells high-end, special-edition trucks and sports cars. “We had a $125,000 Shelby pickup, and I said, ‘Who’s going to buy that?’” he recalled. “The next day it was gone. There’s so much free cash in the market. People are paying full price, even for the most expensive vehicles we have.”Buyers often have to take vehicles that don’t meet their specifications, and move fast when they find one close enough.Gary Werle, a retiree in Lake Worth, Fla., recently traded in a 2017 Buick Encore for a 2021 version, drawn by its safety features such as blind-spot monitoring and automatic braking. “I’m 80, and I thought it would be good to have those,” he said.On Memorial Day, his dealer called, and Mr. Werle didn’t hesitate. “I was at a party and left to buy the car,” he said. “I’d heard about the shortages, so I wasn’t sure the car would be there the next day.”Dealers are selling fewer vehicles, but their profits are up a lot. That’s a huge change from the spring of 2020, when most dealerships shut down for roughly two months and they had to lay off workers to survive.“The strong demand from consumers paired with a lack of supply from the manufacturers has created a gusher of profits for dealers,” said Alan Haig, president of Haig Partners, an automotive consultant.Now, dealers typically dictate the price of new or used cars. New cars typically sell for the manufacturer’s suggested retail price or, in some cases, thousands of dollars more for models in very high demand. Haggling over used cars is a distant memory.“There’s not a lot of negotiating that goes on right now on price,” said Wes Lutz, owner of Extreme Dodge in Jackson, Mich.Some customers have balked at paying top dollar for new cars and have opted to make do with older vehicles. That has increased demand for parts and service, one of the most profitable businesses for car dealers. Many dealers have extended repair-shop hours. Mr. Ricart said he had some repair technicians putting in 10- or 12-hour days three or four days in a row before taking a few days off.Of course, the shortage of cars will end, but it isn’t clear when.As Covid-19 cases and deaths rose last spring, automakers shut down plants across North America from late March until mid-May. Since their plants were down and they expected sales to come back slowly, they ordered fewer semiconductors, the tiny brains that control engines, transmissions, touch screens, and many other components of modern cars and trucks.At the same time, consumers confined to their homes began buying laptops, smartphones and game consoles, which increased demand for chips from companies that make those devices. When automakers restarted their plants, fewer chips were available.Many automakers have had to idle plants for a week or two at a time in the first half of 2021. G.M., Ford Motor and others have also resorted to producing vehicles without certain components and holding them at plants until the required parts arrive. At one point, G.M. had about 20,000 nearly complete vehicles awaiting electronic components. It began shipping them in June.Ford has been hit harder than many other automakers because of a fire at one of its suppliers’ factories in Japan. At the end of June, Ford had about 162,000 vehicles at dealer lots, fewer than half the number it had just three months ago and roughly a quarter of the stock its dealers typically hold.This month, Ford is slowing production at several North American plants because of the chip shortage. The company said it planned to focus on completing vehicles.Mr. Ricart recently took a trip on his Harley-Davidson to Louisville, Ky., and got a look at the trucks and S.U.V.s at a Ford plant that are waiting to be finished. He said he had seen “thousands of trucks in fields with temporary fencing around them.”He said he hoped to get some of those trucks soon because Ricart Ford had only about 30 F-150 pickup trucks in stock. “We’re used to selling a couple hundred a month.” More