Electric vehicle makers face another disruption as the power crisis hits China

Electric vehicle manufacturers around the world may be looking at another disruption as Contemporary Amperex Technology Co. (CATL), the world’s top battery maker, has shut down its plant in China’s Sichuan province as a drought-induced power crisis worsens. Contemporary Amperex halted activity at its major lithium battery base in Yibin through August 20, reports Bloomberg.

Sichuan has become a key development hub for battery makers aiming to harness hydropower to reduce emissions in their production processes. CATL has about 100 gigawatts of existing and planned capacity in the province, the most after Fujian.

The auto industry that has been still reeling under the impact of the chip crisis and other supply chain-related issues seems to be facing another major jolt from this as CATL provides electric vehicle batteries to many auto manufacturers around the world.

Meanwhile, Toyota too has been severely impacted by the power crisis in China. The Japanese automaker shut a factory in the provincial capital of Chengdu and will keep operations suspended until August 20, claims the report. Volkswagen AG too has said that its factory in Chengdu is affected by power shortages. However, it is only expecting slight delays in deliveries to customers.

The province is home to several other companies including key auto component suppliers and automakers as well. It is not sure if other auto manufacturers and components manufacturers too have been impacted similarly.

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