Does the AI revolution live up to the hype? This will be the biggest tech story of 2026. Meanwhile, the industry is making things difficult for car companies — in a somewhat unlikely way.
Welcome back to Critical materialsYour daily report on the news driving the future of transportation. This morning: A new chip shortage is brewing, California hits a milestone in electric vehicle sales, and New Jersey’s controversial e-bike law just passed.
Let’s get into it.
A must-read automotive and technology digest, every day of the week.
25%: Do you remember the chip shortage?
Photography: Getty Images
If you’ve basically blocked out everything related to the coronavirus era like I have, allow me to jog your memory. The global pandemic has disrupted supply chains, hitting semiconductor supplies in particular hard. This was bad because these chips go into almost all consumer electronics, and you need hundreds of them to make a modern car.
Car production slowed to a crawl. The aftershocks of a very limited supply of cars are still being felt, especially if you look at how high new car prices are to this day.
The bad news: There’s a new chip crisis on the horizon. This time, it’s the AI’s fault. The technology industry’s unstoppable appetite for putting chips in its data centers is expected to cripple supply for the auto business. Bloomberg This was reported on Tuesday, citing some analyst reports.
Here is the port with details:
The specific type of semiconductor in question is dynamic random access memory chips, known as DRAM. While automakers and their parts makers rely on older, less advanced memory chips than those used in AI servers and data centers, both rely on a limited supply of silicon chips.
As demand for advanced memory chips rises, the automotive industry must move quickly to support supply strategies.
according to Report from S&P Global MobilityHowever, the shortage of DRAM will cause chipmakers to prioritize higher-margin customers rather than car companies. This would leave automakers struggling to obtain scrap, and could see prices rise by up to 100%.
Analysts from UBS said that car companies that rely more on electronic components are most at risk Bloomberg. Analysts think so Tesla and Rivian They are more at risk here than, say, GM or Ford.
If we are to take the pandemic-era chip crisis as a guide, a semiconductor 2.0 shock that reduces auto manufacturing capacity and increases input costs could push up vehicle prices at a time when cars are already more expensive than ever.
50%: E-bike crackdown in New Jersey
Rees and Muller Carry e-bike
Photo by: Maddox Kay/InsideEVs
Nothing makes me happier than seeing young parents here in the Bay Area taking their kids around on electric bikes. This means one car is less on the road, clogging up streets, causing accidents, or – in the case of combustion vehicles – polluting the air.
E-bikes are the fastest, most fun and healthiest way to get around many cities. They now come in all sorts of different shapes, from nimble commuter bikes to large grocery haulers. Overall, I think their boom in popularity in recent years is a great thing for the community.
Not everyone thinks so. Responding to e-bike accidents in the state, including some fatal ones, New Jersey Governor Phil Murphy I signed the law He suppressed the two bikes on his final day in office on Monday.
The law is now the most restrictive e-bike law in the country, requiring e-bikes to be registered, insured and their riders licensed. This means no riders under the age of 15. The new law is the latest sign of growing backlash against e-bike use, especially among children and teenagers.
But this measure ignores the fact that many young people who get into trouble on e-bikes are riding high-speed, high-speed vehicles, which are illegal on the streets without a license anyway. Bike advocates criticize the move. This is likely to slow down the adoption of the mode of transportation A proven force for replacing car trips and reducing transportation emissions.
75%: 2.5 million ZEV
California still leads the United States in electric vehicle sales. (The chart includes both battery-electric and hybrid vehicles.)
Photo by: California Energy Commission
On Tuesday, California announced a milestone: More than 2.5 million zero-emission vehicles have been sold cumulatively In the state by the end of 2025. To be more precise: 2,551,121. This number includes approximately two million battery-powered cars, with the remainder consisting of hybrid cars and a small number of hydrogen cars.
It’s a strong signal that despite the political chaos at the federal level and the fragile atmosphere more broadly, progress in transportation electrification has come a long way. The movement continues, especially in places with strong local incentives and interests. California still makes up a large share of the U.S. electric vehicle market, with nearly a quarter of the nation’s full electric vehicle sales occurring there last year.
In 2025, Californians bought some 408,000 ZEV carsgood enough for a 22.9% market share of new light-vehicle sales in the state. In Q4, when the post-tax credit shock occurred, California still had 18.9% of ZEV’s share. Not too shabby.
100%: E-bikes. yes or no?
You made my thinking clear. What do you think about e-bikes and the correct way to organize them?
Contact the author: Tim.Levin@InsideEVs.com
