China heatwave hits Tesla and SAIC as power rationing drags on
Sichuan has ordered most factories to close for six days until Saturday due to extreme heat and the drought that caused an electricity crisis. The closure has since been extended for another five days.
Last week, companies asked the Shanghai government to help their suppliers in Sichuan, which have been hit by power rationing.
According to official documents cited by Chinese state media, 16 auto suppliers in the region were unable to manufacture enough parts last week due to power cuts. The Shanghai Economic Planning Agency asked Sichuan to increase the power supply of these enterprises, including Chengdu Yinli Auto Parts.
CNN Business has reached out to the Shanghai government and the two automakers for comment, but has not yet received a response.
China is facing its worst heat wave since 1961, with temperatures exceeding 40 degrees Celsius (104 degrees Fahrenheit) in more than 200 cities. Weather conditions have caused the Yangtze River, a crucial river in the country, to shrink and cause drought in more than 70 cities.
Extreme heat and drought caused a spike in demand for air conditioning and a drop in hydroelectric power supply, straining the power grid.
Sichuan, which is a hub for makers of semiconductors, lithium batteries and auto parts, shut down most factories in the province last Monday. The local government said the move was to ensure enough electricity for residents.
The province extended the power outage for another five days on Saturday as high temperatures persisted around 40 degrees Celsius, while light rainfall persisted. Electricity rationing has already impacted large international companies.
— CNN’s Beijing bureau contributed to this report.