Tesla Inc. (NASDAQ:TSLA) and SAIC Motor Corp. informed Shanghai’s government that they might have trouble maintaining production if a power shortage in Sichuan continues to impact suppliers, according to sources with knowledge of the matter, prompting city officials to ask the southwestern province to prioritize electricity for the carmakers’ suppliers.
The two automakers notified authorities in Shanghai, where they operate plants, that significant portions of their supply chains may be damaged by power outages in Sichuan, which is experiencing the worst drought in recorded history. In a document that was later shared on Chinese social media, the Shanghai Municipal Commission of Economy and Information reached out to officials in Sichuan.
Sichuan is among the most populous provinces in China. It primarily depends on hydropower, making it especially susceptible to heat waves and drought that are increasing the need for air conditioning and depleting reservoirs behind hydro dams.
According to the paper, the Shanghai government requested that the energy supply be extended to 16 Sichuan-based auto-parts companies, including Chengdu Yinli Car Parts, the sole company identified in the document.
Tesla (NASDAQ:TSLA) is coordinating with the governments of Shanghai and Sichuan to guarantee its suppliers in Sichuan have adequate power, the sources said, adding that the automakers have not yet seen any production delays.
The Tesla (NASDAQ:TSLA) representative in China declined to comment. A representative from SAIC, one of China’s top state-owned automakers, stated via WeChat that the firm is “actively coordinating with the local government of Sichuan” and attempting to mitigate the effects of the power shortage.
Toyota Motor Corp. and China’s Contemporary Amperex Technology Co. Ltd., the world’s leading battery manufacturer, have previously shut down units in Sichuan, with Toyota closing a plant in the provincial capital of Chengdu and CATL ceasing operations at its key lithium battery base in Yibin. Both sanctions are anticipated to end on August 20.
The Nikkei newspaper said on Friday that Panasonic Holdings Corp. halted operations at a materials facility and that auto-parts supplier Denso Corp. also ceased operations, citing the businesses.
People on Chinese social media labeled the Shanghai administration and its entities as greedy and arrogant in response to the possibility that Tesla (NASDAQ:TSLA) and SAIC suppliers may be prioritized for power while people suffer in high heat.
Another said It is simply excessive. We desperately require electricity. Yesterday, thirteen persons were hospitalized due to heat stroke.
Featured Image : Megapixl © Bwylezich
