Ford shares fall by 10% due to chip shortage; shows biggest one-day loss in 10 months

Shares of Ford Motors Co. fell more than 10% on Thursday, as it had warned that global shortage of semiconductor chip would cut its second quarter vehicle production in half.

RBC Capital Markets analyst, Joseph Spak wrote in a note “Ford joins a growing chorus saying that semiconductor issue won’t be resolved until 2022.”

The shortage issue has forced the U.S. automakers to raise prices on their most profitable vehicles, as to cut their production loss incurred, due to limited production of their least profitable vehicles.

Analyst believe that the trend won’t last long. With the supply of chips will return, the prices will go down by the end of the year.

Shares of General Motors, rival of Ford, also fell over 4% on Thursday.

Ford’s likely to depend on suppliers such as Visteon, BorgWarner, Tenneco, Adient Plc, Lear Corp, for its second quarters’ production, as per Spak.

The U.S. automaker company’s reported biggest one-day loss in more than ten months. But they still are 30% up compared to last year.