China Drought Threatens Tesla Production
Tesla is among several Western automakers that could see production capabilities in China compromised because of a drought affecting the country’s largest river, the Yangtze.
While the river is a record low levels affecting many parts of the economy reliant on it, companies in the Sichuan area are particularly at risk because of their dependence on hydroelectric power produced by the river’s many dams. This means companies supplying automotive parts to Tesla’s plant in Shanghai may have to close down suppressing the automaker’s ability to build vehicles, the BBC’s morning business program reported today.
Reuters reports that China’s State Grid has promised to do its best to dispatch power to the Sichuan province, which is now imposing strict consumption controls on hydroelectricity. Companies with operations in Sichuan, including CATL, the world’s largest battery maker, and Japan’s Toyota and Germany’s Volkswagen, have already suspended production in the province as a result of the restrictions, media reports say.
— Paul Myles is a seasoned automotive journalist based in Europe. Follow him on Twitter @Paulmyles_
