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AI Chips & Compute

RAM Shortage Pushes Up Car Prices, Analysts Warn

AI-driven RAM shortage expected to raise car prices by several percentage points, adding about $2,000 to a typical new vehicle.

AI News Feed · 2026-08-21 20:33

The average price of a new car in the U.S. has already reached about $50,000, partly due to technology costs. "There's just a baseline level of tech, and thus a baseline level of cost, required of every vehicle," Karl Brauer, executive analyst at iSeeCars, told The Atlantic. AI companies are consuming available memory for data centers, driving up prices for phones, laptops and other consumer electronics, with cars next.

Sam Abuelsamid, an analyst at Telemetry and a former automotive engineer, said the shortage will likely raise vehicle prices by a few percentage points over the next year. A 4 percent hike amounts to roughly $2,000 on average. Cars with centralized computers will be most affected, but "even if you don't need the high-end chips, you're going to pay more even for the low-end chips just because of the supply constraint," he said.

On a recent earnings call, Ford's chief financial officer said the company had paid $1 billion in higher materials costs due to the memory shortage and inflation. GM and Volkswagen have also noted rising chip costs to investors. Ford and GM did not respond to a request for comment; a Volkswagen spokesperson said the company recognized increased demand for memory chips, mainly due to growing requirements in other industries, and has taken measures to mitigate supply risks.

RAMageddon is expected to last for several years, but consequences for car buyers may be permanent. During the pandemic, chip shortages forced nearly all major car companies to slash production and focus on higher-end, higher-profit vehicles. Ivan Drury, director of insights at Edmunds, said customers willing to spend six figures are less likely to care about a 5 or 10 percent hike. Since the pandemic, the average new-vehicle price has jumped $11,000. The AI-fueled chip crisis could play out more severely, with prices possibly jumping to $60,000 and beyond. Automakers are also introducing in-car advertisements and paywalling features such as heated seats to mitigate higher prices, as cars become more like computers.