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

Trendingnow

1

Now worth $200 million, Sarah Jessica Parker credits being ‘one of eight kids that struggled financially’ for her hunger, ambition, and work ethic

2

The Pentagon said Iran War costs $29 billion, but the real cost is closer to $200 billion—and counting

3

After forcing workers back to the office, Goldman Sachs and JPMorgan Chase are now letting their staff work remotely—but only for the World Cup

1

Now worth $200 million, Sarah Jessica Parker credits being ‘one of eight kids that struggled financially’ for her hunger, ambition, and work ethic

2

The Pentagon said Iran War costs $29 billion, but the real cost is closer to $200 billion—and counting

3

After forcing workers back to the office, Goldman Sachs and JPMorgan Chase are now letting their staff work remotely—but only for the World Cup
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
Add Fortune on Google for similar content.

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
Add Fortune on Google for similar content.

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

Man in a suit and tie
InvestingAmazon
Bill Ackman, David Tepper, and other billionaire fund managers are quietly piling into Amazon
By Amanda GerutJune 25, 2026
2 hours ago
Ikea’s billionaire founder was so frugal that he bought clothes from flea markets and took free salt and pepper from restaurants
SuccessBillionaires
Ikea’s billionaire founder was so frugal that he bought clothes from flea markets and took free salt and pepper from restaurants
By Orianna Rosa RoyleJune 25, 2026
2 hours ago
Current ARM mortgage rates report for June 25, 2026
Personal FinanceReal Estate
Current ARM mortgage rates report for June 25, 2026
By Glen Luke FlanaganJune 25, 2026
2 hours ago
Current refi mortgage rates report for June 25, 2026
Personal FinanceReal Estate
Current refi mortgage rates report for June 25, 2026
By Glen Luke FlanaganJune 25, 2026
2 hours ago
Mortgage rates today, June 25, 2026
Personal Financemortgages
Mortgage rates today, June 25, 2026
By Glen Luke FlanaganJune 25, 2026
2 hours ago
Fortune 500 bosses demanding staff return to the office share one trait: narcissism, research finds
C-SuiteLeadership
Fortune 500 bosses demanding staff return to the office share one trait: narcissism, research finds
By Claire ZillmanJune 25, 2026
2 hours ago

Most Popular

Now worth $200 million, Sarah Jessica Parker credits being ‘one of eight kids that struggled financially’ for her hunger, ambition, and work ethic
Success
Now worth $200 million, Sarah Jessica Parker credits being ‘one of eight kids that struggled financially’ for her hunger, ambition, and work ethic
By Orianna Rosa RoyleJune 24, 2026
1 day ago
The Pentagon said Iran War costs $29 billion, but the real cost is closer to $200 billion—and counting
Economy
The Pentagon said Iran War costs $29 billion, but the real cost is closer to $200 billion—and counting
By Jacqueline MunisJune 24, 2026
1 day ago
After forcing workers back to the office, Goldman Sachs and JPMorgan Chase are now letting their staff work remotely—but only for the World Cup
Success
After forcing workers back to the office, Goldman Sachs and JPMorgan Chase are now letting their staff work remotely—but only for the World Cup
By Orianna Rosa RoyleJune 23, 2026
2 days ago
Amazon's record Prime Day masks a darker truth: Americans are spending more and getting less
Retail
Amazon's record Prime Day masks a darker truth: Americans are spending more and getting less
By Nick LichtenbergJune 24, 2026
18 hours ago
Ray Dalio just finished a 10-day trip to China. He says global leaders know America ‘doesn’t have what it takes to fight to maintain its empire’
Asia
Ray Dalio just finished a 10-day trip to China. He says global leaders know America ‘doesn’t have what it takes to fight to maintain its empire’
By Nick LichtenbergJune 24, 2026
20 hours ago
Trump’s international student crackdown kicked off a domino effect that could shave nearly $500 billion off the economy
Economy
Trump’s international student crackdown kicked off a domino effect that could shave nearly $500 billion off the economy
By Tristan BoveJune 24, 2026
15 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.