The power supply in Sichuan province – China’s most important hydropower center – has created production for major car manufacturers in Shanghai. Tesla (TSLA)According to Chinese state media.
Sichuan has ordered most factories to close for six days until Saturday due to the extreme heat Drought caused by power outage. The event was extended for five more days.
SAIC Motor – China’s largest automaker – and Tesla reported to the Shanghai municipal government that the power outage in Sichuan had disrupted supply chains and affected production at their factories in the city.
Located 1,200 miles from Sichuan province, Shanghai is home to Tesla’s “gigafactory,” which has already built one million cars for the American EV company.
SAIC has three main factories in Shanghai, including two joint ventures Volkswagen (Vilkaf) And General Motors (GM).
Last week, the companies asked the Shanghai government to help their suppliers in Sichuan, which have been hit by power outages.
According to official documents reported by Chinese state media, 16 automobile suppliers in the region were unable to produce enough goods due to power outages last week. Shanghai Economic Planning Agency asked Sichuan To increase the supply of energy to these companies, including Chengdu Yinli Auto Parts.
“SAIC and Tesla are leading companies in Shanghai to build a world-class automotive industry center, and have established important supply partnerships with many auto parts companies in Sichuan province,” the Shanghai government told Sichuan officials, according to documents cited by Kaixin. .
CNN Business reached out to the Shanghai government and the two automakers for comment, but did not immediately receive a response.
China in 2010 It faced its worst heat wave since 1961; Temperatures exceeded 40 degrees Celsius (104 degrees Fahrenheit) in more than 200 cities. The weather has reduced the country’s vital Yangtze River and caused drought in more than 70 cities.
Extreme heat and drought have increased demand for air conditioning and declining hydropower supplies have put pressure on the electricity grid.
Sichuan, a hub for makers of semiconductors, lithium batteries and auto parts, closed most of its factories in the province on Monday. The local government said the move was to ensure adequate power for residents.
As the maximum temperature hovered around 40 degrees Celsius, the district has extended it for another five days on Saturday as light rainfall continued. Energy distribution has already affected major international companies.
Japanese car manufacturer Toyota (TM)It has a factory in the city of Chengdu, which shut down last week, Reuters reported. The company did not immediately respond to a request for comment.
Apple (APL) Supplier Foxconn’s plant in Sichuan was also affected, although the company said the impact was “not significant.” BOE Technology, a major maker of LCD and OLED panels, also had to make “production adjustments” in Sichuan last week in response to a power outage.
The Shanghai question Special treatment for the car makers It sparked an outcry on Chinese social media, with many netizens calling it “inappropriate” and “shameful” at a time when tens of thousands of people in Sichuan are without power.
Automakers in China, including Tesla, are recovering from a months-long lockdown in Shanghai earlier this year that hit production and suppliers. Auto sales saw a sharp decline in April, with Tesla’s sales plunging 98% that month.
— CNN’s Beijing bureau contributed to this report.
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