China’s heatwave closes factories that supply parts to Tesla, Intel, and Toyota

Illustration by Alex Castro / The Verge

The world's biggest electric vehicle battery maker, Contemporary Amperex Technology Co. LIMITED (CATL), and Intel are among the major companies shutting down their factories for six days in China's Sichuan province due to a heatwave.

The move affects factories that work for companies like Apple, Texas Instruments, Volkswagen, and more.

After the worst heatwave in 60 years resulted in increased air conditioning usage in China, the government ordered all factories in the province to cease operations until August 20th. The temperature went up to 104 degrees in some cities.

According to the Chinese state news outlet Sichuan Daily, authorities are trying to conserve power for residences in the region as they are warned of the most severe and extreme power shortage in the country. The region is reliant on hydropower and it is vulnerable to the heatwave and the dry weather.

According to CNN, Sichuan is an important area for the Semiconductor and Solar Panel industries. Polysilicon is a key solar panel ingredient and is found in the mineral resource rich region. The province is a hub for the production of electric car and smartphones batteries.

As supply goes down, some analysts think the price of polysilicon could go up. The price of polysilicon went up just two days after the shutdown.

Some companies don't expect a lot of disruption. The company that makes Apple's iPad in the region said that the dry spell hasn't affected them yet. According to reports, Volkswagen said it wasn't expecting long delivery delays.