• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

Social Security's 2032 deadline puts a 22% cut on the table — but Washington has way less room to negotiate than 1983

2

Boomers actually do hold most of the wealth and power. So why do they call it 'whiny' to point that out?

3

CEO of $20 billion AI firm Perplexity says the secret to success is ‘sleeping with that fear’ that your competitor will steal your idea

1

Social Security's 2032 deadline puts a 22% cut on the table — but Washington has way less room to negotiate than 1983

2

Boomers actually do hold most of the wealth and power. So why do they call it 'whiny' to point that out?

3

CEO of $20 billion AI firm Perplexity says the secret to success is ‘sleeping with that fear’ that your competitor will steal your idea
Tesla

First COVID, now a heat wave: Power cuts in Sichuan are the latest threat to Tesla’s China supply chain

Nicholas Gordon
By
Nicholas Gordon
Nicholas Gordon
Asia Editor
Down Arrow Button Icon
Nicholas Gordon
By
Nicholas Gordon
Nicholas Gordon
Asia Editor
Down Arrow Button Icon
August 22, 2022, 5:12 AM ET
An aerial view of Tesla's Shanghai Gigafactory
Tesla had recovered from Shanghai's COVID outbreak earlier this year. Now a heatwave in Sichuan is a new threat to the carmaker's supply chain.Qilai Shen—Bloomberg via Getty Images

On Sunday, the government of Sichuan—a major Chinese manufacturing hub for the electric vehicle industry and home to several of Tesla’s suppliers—told factories they’d have to go without power for several more days as the region reserved power for residents amid a record drought and heat wave. According to company announcements, officials extended until Aug. 25 the power blackout for manufacturing imposed last Monday, citing an ongoing power shortage due to high temperatures and low rainfall.

Disrupted manufacturing in Sichuan is likely to hit Tesla especially hard since the automaker is still trying to recover from supply disruptions caused by a two-month COVID lockdown in Shanghai, the home of its China factory, earlier this year. 

Last week, Tesla reportedly warned Shanghai’s government that factory closures in Sichuan were depriving it of parts and threatening production delays. That news prompted Shanghai officials to ask Sichuan last Tuesday to grant 16 suppliers for Tesla and state-owned carmaker SAIC Motor priority when supplying power to factories. “Please reduce the power restriction time during the day for the suppliers mentioned above,” the letter asked.

Tesla China did not immediately respond to a request for comment. 

Shanghai has been a key ally for Tesla, reportedly helping the carmaker reopen operations in the middle of the city’s two-month COVID lockdown earlier this year. But Shanghai’s sway didn’t convince its fellow province to change tack. After Chinese social media users blasted the city’s request, officials backtracked, asking Sichuan to merely consider restoring power to auto suppliers first. 

Heat wave

China’s heartland has reported temperatures as high as 104° F and low precipitation for over two months, making the current heat wave the longest on record. Some cities like Nanjing in Jiangsu Province, which average three to four inches of rain in August, have not recorded any precipitation this month, according to China’s meteorological agency. The Yangtze River is now down to just under half its natural width. 

Falling water levels is a problem for Sichuan Province, which relies on hydropower for 80% of its electricity. High temperatures are also driving residents to turn on their air conditioners to beat the heat. Peak electricity demand is 25% greater now than during the same period a year ago.

A dry Yangtze River in Chongqing, China
China’s record heat wave means trouble for suppliers in provinces like Sichuan—and for the companies like Tesla that rely on them.
Qilai Shen—Bloomberg via Getty Images

Last Monday, Sichuan officials announced that factories would need to limit operations until Aug. 20 to reserve electricity for residences—a period extended to Aug. 25 on Sunday. If Sichuan continues to see low rainfall, then the end date could be pushed out further. 

If the shutdown lasts “10 days, two weeks, or anything more than that, then we’re really talking about serious supply disruptions,” Mirko Woitzik, global director of intelligence solutions for Everstream Analytics, previously told Fortune. 

Supply headaches

Tesla struggled to keep its Shanghai Gigafactory running through the city’s two-month COVID lockdown earlier this year. The factory was allowed to reopen under a “closed-loop system,” where workers lived and slept on-site to minimize the chance of a COVID outbreak. But production still slumped due to a lack of parts, as COVID disrupted operations at Tesla suppliers.

Tesla reported its first-ever declines in quarterly vehicle deliveries and profits in the second quarter of this year. CEO Elon Musk called the China COVID situation “supply-chain hell,” and said that the company liquidated 75% of its Bitcoin holdings in order to ensure it had enough cash on hand.

The Shanghai Gigafactory reportedly returned to pre-lockdown levels of production in late May, just before the city officially ended its lockdown. But production fell again in July as the carmaker upgraded its equipment to increase production capacity long-term. A June memo from Tesla said the upgrades will increase daily production by 30%, according to Reuters.

Tesla still faces headwinds. China’s COVID-zero policy, which often imposes snap lockdowns after just a handful of cases, is disrupting factory operations. Tesla also faces a more challenging electric car market. Chinese consumer demand is still sluggish after COVID, and Tesla faces greater competition from local carmakers. 

For now, all manufacturers like Tesla can do is wait until Sichuan turns on the power again. Chinese meteorologists currently forecast rain for Thursday. 

Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.

About the Author
Nicholas Gordon
By Nicholas GordonAsia Editor
LinkedIn iconTwitter icon

Nicholas Gordon is an Asia editor based in Hong Kong, where he helps to drive Fortune’s coverage of Asian business and economics news.

See full bioRight Arrow Button Icon

Latest in

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in

Oil and gas supplies could take months to return to normal after Iran deal, energy experts say
EnergyOil
Oil and gas supplies could take months to return to normal after Iran deal, energy experts say
By Cathy Bussewitz and The Associated PressJune 14, 2026
3 hours ago
Markets celebrate U.S.-Iran deal as both sides confirm this time is real. Trump says oil will flow and ‘I never cared about regime change’
EnergyIran
Markets celebrate U.S.-Iran deal as both sides confirm this time is real. Trump says oil will flow and ‘I never cared about regime change’
By Jason MaJune 14, 2026
4 hours ago
Trump says a deal has been reached with Iran and orders end to U.S. naval blockade as Hormuz to reopen — ‘Ships of the World, start your engines’
PoliticsIran
Trump says a deal has been reached with Iran and orders end to U.S. naval blockade as Hormuz to reopen — ‘Ships of the World, start your engines’
By Julia Frankel, Abby Sewell, Munir Ahmed, Will Weissert and The Associated PressJune 14, 2026
5 hours ago
Social Security faces steep cuts. These senators want to bet on stocks and $27 trillion in debt to save it—but ‘the gamble does not always pay off’
InvestingSocial Security
Social Security faces steep cuts. These senators want to bet on stocks and $27 trillion in debt to save it—but ‘the gamble does not always pay off’
By Jason MaJune 14, 2026
6 hours ago
Dario Amodei, Anthropic CEO
AIAnthropic
A warning from Amazon led the White House to shut down Anthropic’s Mythos model
By Beatrice NolanJune 14, 2026
6 hours ago
Vietnam has bold plans for its economic future. It will need U.S. tech, capital, and speed to make them happen
CommentaryVietnam
Vietnam has bold plans for its economic future. It will need U.S. tech, capital, and speed to make them happen
By Brian McFeeters and Vu Tu ThanhJune 14, 2026
6 hours ago

Most Popular

Social Security's 2032 deadline puts a 22% cut on the table — but Washington has way less room to negotiate than 1983
Personal Finance
Social Security's 2032 deadline puts a 22% cut on the table — but Washington has way less room to negotiate than 1983
By John W. Diamond and The ConversationJune 12, 2026
2 days ago
Boomers actually do hold most of the wealth and power. So why do they call it 'whiny' to point that out?
Economy
Boomers actually do hold most of the wealth and power. So why do they call it 'whiny' to point that out?
By Nick LichtenbergJune 14, 2026
16 hours ago
CEO of $20 billion AI firm Perplexity says the secret to success is ‘sleeping with that fear’ that your competitor will steal your idea
Success
CEO of $20 billion AI firm Perplexity says the secret to success is ‘sleeping with that fear’ that your competitor will steal your idea
By Preston ForeJune 13, 2026
2 days ago
Iran proved it can close the Strait of Hormuz, but the U.S. is advertising very loudly that the world's top superpower can at least punch open a hole
Energy
Iran proved it can close the Strait of Hormuz, but the U.S. is advertising very loudly that the world's top superpower can at least punch open a hole
By Jason MaJune 14, 2026
9 hours ago
Gen Z fled San Francisco for Texas and Florida. Now they’re turning ‘welcomer cities’ into the next big tech towns
Real Estate
Gen Z fled San Francisco for Texas and Florida. Now they’re turning ‘welcomer cities’ into the next big tech towns
By Sydney LakeJune 13, 2026
2 days ago
The Gen Z cofounder of $1.6 billion Whop says his platform has minted over 650 millionaires—he wants to make work fun and money worries obsolete
Success
The Gen Z cofounder of $1.6 billion Whop says his platform has minted over 650 millionaires—he wants to make work fun and money worries obsolete
By Emma BurleighJune 14, 2026
17 hours ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.