Tesla, SAIC car output hit as power shortage in China’s Sichuan province roils supply chain

Name: How does China generate its energy?
Uploaded: 2022-08-19T12:57:23.000Z
Duration: 2 min 52 s
Description: How does China generate its energy?

A power shortage in Sichuan province is disrupting car production in Shanghai, just as China’s Motown was recovering from a two-month lockdown

Tesla and SAIC have enlisted the help of the Shanghai government to request authorities in Sichuan to prioritise power supply to automotive component makers

Reading Time:2 minutes

Why you can trust SCMP

Volkswagen electric vehicles are assembled at the carmaker’s factory, operated with local partner SAIC Motor, in Shanghai. Photo: Bloomberg

Daniel Ren

Published: 8:57pm, 19 Aug 2022

A power shortage in southwestern China’s Sichuan province is disrupting car production in Shanghai, just as the mainland’s carmaking heartland was recovering from a two-month lockdown.

The outages have hit output at Tesla’s Gigafactory and SAIC Motor, the mainland’s largest home-grown carmaker, because of the impact on the industry’s supply chain.

The companies have enlisted the help of the Shanghai government to support its vendors in Sichuan. The Shanghai Commission of Economy and Information Technology has requested authorities in Sichuan to prioritise power supply to 16 key automotive supply-chain vendors that have business ties with Tesla and SAIC, according to a document dated August 16 circulating online. The Shanghai commission confirmed that the document was genuine.

The request for uninterrupted power supply comes even as the Sichuan government has prioritised electricity for residential use amid an unrelenting heatwave that has sent temperatures as high as 40-42 degrees Celsius (104-108 degrees Fahrenheit). Sichuan decided to limit electricity supply from August 16 to August 20 as a severe drought has reduced power output at the province’s hydropower plants.

02:52

How does China generate its energy?

Tesla and SAIC did not reply to requests for comment.

“Shanghai’s automotive firms are vulnerable to a new round of supply chain snarls because they have already lost thousands of vehicles in production during the two-month lockdown,” said Peter Chen, an engineer with car parts maker ZF TRW in Shanghai. “The power cuts in Sichuan, where a group of important suppliers are based, will stop Tesla and SAIC from using their full production capacity,” Chen said.