Analysis
July 18, 2022
Toyota Texas Reduces Production Due to Energy, Parts Issues
Written by Laura Miller
The ongoing chip shortage continues to impact Toyota Motor North America’s production rates, and now the company is facing additional issues from a potential energy crisis impacting the state of Texas.
Extreme hot weather is driving record power demand, putting pressure on the state’s electric grid. Recall that in February 2021, snow, ice, and record-low temperatures caused the grid to fail, leaving millions without access to electricity.
In portions of south central Texas, a heat advisory is currently in effect through Tuesday, with expectations of air temperatures of 102-105 degrees Fahrenheit and a heat index up to 107 degrees. The Toyota Motor Manufacturing, Texas (TMMTX) plant in San Antonio is located within this region.
Although the Electric Reliability Council of Texas has issued conservation appeals to Texas residents and businesses, the grid has managed to hold up thus far this summer.
Toyota is now adjusting and reducing production at the TMMTX plant, a company spokeswoman told SMU, both due to supply chain disruptions and in an effort to conserve electricity.
“Toyota’s North American plants continue to face intermittent production delays due to supply chain disruptions,” the spokeswoman said in an email to SMU. “As the state of the supply chain remains fluid, we are adjusting and reducing production at TMMTX while also contributing to efforts to conserve energy in Texas.”
A production pause at 14 of the automaker’s North American plants was scheduled to begin today, July 18, and is expected to last through the end of the week.
As SMU has reported, the company has slashed production across its North American plants this year due to the global microchip and parts shortages.
By Laura Miller, Laura@SteelMarketUpdate.com
