Chinese factories that supply parts to Tesla, Intel and Toyota close due to heatwave

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Chinese factories that supply parts to Tesla, Intel and Toyota close due to heatwave

Right now, there is a heat wave sweeping across China. It is for this reason that the Chinese province of Sichuan has ordered factories in its territory to close for six days. Indeed, this extreme heat, described as the worst heat wave in 60 years in the country, has caused a shortage of electricity.

Contemporary Amperex Technology Co. Limited (CATL), which is according to The Verge “ the world’s largest manufacturer of batteries for electric vehicles ”, and Intel are among the companies affected by this closure. However, the shutdown of these factories until August 20 will have a number of consequences.


The causes of this temporary plant closure

CNN says the heat wave in China has soared to temperatures of up to 104 degrees Fahrenheit or 40 degrees Celsius in several cities. Following this great heat wave, the Chinese government took the decision to suspend all the activities of the factories located in the province of Sichuan. He fears that residents in the area are running out of power.

According to Sichuan Daily, the officials themselves said the province is facing the ” most serious and extreme moment » in terms of power supply. Moreover, the province is particularly vulnerable to heat waves and drought because it depends on hydroelectricity.

The consequences of this closure

The province of Sichuan is a province which has its importance for the industries of semiconductors as well as solar panels. It is also rich in mineral resources such as polysilicon. This is why the solar photovoltaic and electronic industries are rushing towards it. Not to mention that Sichuan is a key mining center for lithium, an essential element for producing batteries for electric vehicles and smartphones.

Following this, impacts will be felt by the companies directly or indirectly affected by this temporary shutdown. For example, there could be an increase in the price of polysilicon and lithium. But according to The Verge, the price of these materials has indeed already increased. On the other hand, some companies have said they don’t really anticipate any disruptions. Foxconn, the iPad manufacturer in the region, for example, told Bloomberg that it was not too affected by the drought. As for Volkswagen, he said he does not ” did not expect long delays in delivery “.


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