Toyota and Contemporary Amperex Technology Co Halt Operations in China’s Southwestern Province

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Following the continued power crisis rocking China, auto giant Toyota Motor Corp and leading battery maker Contemporary Amperex Technology Co. have shut down their plants in Sichuan province.

The Japanese carmaker has also reportedly closed its factory in the provincial capital of Chengdu, as it plans to suspend all operations until August 20. Similarly, a company representative from Contemporary Amperex stated that it had stopped production at its Lithium battery factory located in Yibin, adding that operations will resume in full swing once the power situation is sorted out. 

Sichuan province, one of the country’s most populous cities, relies heavily on hydropower. Unfortunately, the extreme heat wave and drought bedeviling the country are drying up reservoirs and dams, leading to insufficient power generation. This has forced many companies to halt production pending when authorities find a viable solution. 

China’s southwestern province is an essential hub for battery makers looking to leverage hydropower to reduce emissions generated through their production processes drastically. Contemporary Amperex Technology Co. has nearly 100 gigawatts of existing and planned capacity in the country’s southern province, its second largest capacity after Fujian. 

This isn’t the first time that top companies in the region will be shutting down their operations because of acute power shortages. On Monday, Volkswagen AG stated that power shortages severely impacted its Chengdu production unit, causing a slight delay in client deliveries. Foxconn Technology Co, which makes Apple iPads acknowledged the impact of drought on the power supply but added that it is still managing to keep up with production. 

According to a spokesperson from Toyota, the local government instructed factories in the region to suspend production until August 20. Note that Toyota’s Chengdu plant manufactures 30,000 cars yearly, including the likes of the Landcruiser Prado. 

Sichuan’s peculiar power situation

Although other regions are dealing with power crises, Sichuan seems to be the most affected, especially because the province relies heavily on dams and reservoirs for electricity. Unfortunately, the sustained drought experienced in the region has caused dams and reservoirs to dry up, affecting power generation in the region. 

Nitish Vaibhav
Nitish Vaibhav
Nitish Vaibhav is the Founder of the The Trading Bay. A computer science engineer turned an Entrepreneur 5 years ago. He has been in trading since 4 years in Forex and Crypto using his price action strategies. Involved in Content Creation full time for 3 years, Nitish is top rated writer on many content writing websites. He is also a YouTuber in India making videos about Crypto and Forex.

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