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Hiccup in Apple’s and Tesla’s supply chain INTL

Hiccup in Apple’s and Tesla’s supply chain 

It was bad enough when electrical components were missing — now, electricity has gone out the window too. Power is being rationed across all of northeastern China, and many factories had to shut down. The shortage has been a cause of the present stringent coal supplies and the renewed interest in preventing climate change (thanks, Greta). The arrival of winter in rural China won’t help as well, as most people will want to keep their homes warm as temperatures drop. 

Two of the companies that will most suffer from this electricity shortage will be Apple (AAPL) and Tesla (TSLA). Apple has already witnessed the closure of three of its most prominent local suppliers. On the other hand, Tesla survives on electricity, and a shortage can do nothing but hurt Elon Musk’s company. Apple shares dropped 1.01%, while Tesla’s recovered 2.19% after releasing its Beta self-driving option. 

why it matters

What seemed to be a factory-only issue is transforming into a residential issue as well. Many homes are being kept in check with limits on how much energy can be used per day, with people encouraged to use less AC and water. The financial impact of this shortage could be far greater than what we can imagine at this point.