Contemporary Amperex Technology Co. Limited (CATL), the biggest electric vehicle battery maker in the world, located in China's Sichuan province, is shutting down temporarily due to an ongoing heatwave, causing a power shortage in the area. The temporary shutdown will only last six days.
This move affects the factories that belong to big companies, such as Tesla, Toyota, Intel, Apple, and Volkswagen. CATL is the EV maker's battery supplier. Temperatures have spiked to 104 degrees Fahrenheit in several cities.
China has ordered all factories in Sichuan to pause operations until Aug. 20. This will help ease the pressure on the power grid.
According to a local publication, authorities are trying to converse power for the homes in the region as Sichuan is facing the worst moment in power supply. This is mainly because the area relies on hydropower; therefore, it is more vulnerable to the heatwave as it dries than hydro dam reservoirs.
The region is also crucial for the semiconductor and solar panel industries. In fact, many manufacturers go there for raw materials to be used in solar photovoltaic and electronics industries. It is also a lithium mining hub, crucial to electric vehicles and smartphone batteries.
Could This Affect Tesla and Other Big Tech Names?
Some think that the temporary shutdown may increase prices for polysilicon and lithium. In fact, on Aug. 17, two days after the shutdown, the price of polysilicon went up.
Many Chinese companies have also warned that their productions could be affected by the power cut in Sichuan. Aside from the region, other major Chinese provinces like Jiangsu, Anhui, and Zhejiang, have pushed households and businesses to conserve power.
Still, many companies are not worried about the disruption that this may cause. Foxconn, the factory making the Apple iPad in Sichuan, isn't impacted by the heatwave. Volkswagen isn't also expecting long delivery delays.
Heatwave Grips China
Luzhou, a city in Sichuan, is also suffering from extreme temperatures. Last week, it was announced that they would shut off the street lights at night to conserve more energy and ease the pressure on the electricity grid.
There are also some regions in China wherein offices have been ordered to increase their AC temperature to above 26 degrees Celsius or shut down lift services for the first three floors to conserve energy.
This extreme heat being experienced in the country has also resulted in crop failures that added to the inflationary pressures last month. It has caused droughts in some agricultural areas in the south, while in the north, the rainfall and flooding have also resulted in crop failures.
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This article is owned by Tech Times.
Written by: April Fowell
