May 14, 2021

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GM cuts fuel-saving module from some pickups due to chip shortage

General Motors said it has stopped including fuel-saving modules in some of its new pickup trucks due to an ongoing, industry-wide shortage of semiconductor chips.

The U.S. automaker confirmed it will produce some of its V8-powered Chevrolet Silverado and GMC Sierra pickup trucks without its gas-saving Dynamic Fuel Management technology for 2021 models.

The fuel management modules improve mileage in the trucks by about one mile per gallon, but because of a chronic lack of computer chips, buyers of the latest models will end up having to pay more at the pump without them.

The automaker said the move affects only the light-duty versions of the Silverado and Sierra with 5.3 liter engines -- the modules will continue to be included the full-size, heavy-duty versions, which have proven to be hot sellers in the wake of coronavirus pandemic.

"By taking this measure, we are better able to meet the strong customer and dealer demand for our full-size trucks as the industry continues to rebound and strengthen," a GM spokesperson told the automotive news website Roadshow.

The decision came as the auto industry is facing an overall shortage of semiconductor chips due to the wild swings in demand caused by the pandemic and a faster-than-expected recovery.

Such chips are used in everything from a car's seats to its steering wheel, but because of their complexity, require long lead times to procure supplies. Automakers cut back on their orders when the pandemic first crushed auto sales early last year but then were caught short when consumer demand quickly picked up.

GM reported the shortage will cut earnings by up to $2 billion this year; Ford Motor said it expects up to $2.5 billion in lower earnings.

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