Tesla suspends production at US vehicle factory due to coronavirus

NEW YORK: Tesla Inc said it will suspend production at its San Francisco Bay Area vehicle factory on March 24, ending a standoff with California authorities concerned about the spread of the coronavirus.
The company said its New York solar roof tile factory also will temporarily suspend production, while operations at its Nevada battery plant will continue.
“Despite taking all known health precautions, continued operations in certain locations has caused challenges for our employees, their families and our suppliers,” the company said in a statement.
Tesla’s shares were down 8 per cent in after-hours trading following the announcement.
The decision to suspend production at the Fremont, California, plant comes as Tesla ramps up production of its Model Y sport utility vehicle at the factory. Demand for the Model Y is expected to be higher than for all of Tesla’s other models combined, Chief Executive Elon Musk has said.
Musk on Thursday tweeted that Tesla’s China operations were running “normally across hundreds of suppliers & all of Tesla Shanghai.” The $2 billion Shanghai factory, which started delivering Model 3 sedans in December, is key to Tesla’s growth strategy and the company plans to expand production capacity there. A Shanghai-based Tesla representative said the Chinese factory’s production rate has exceeded pre-coronavirus levels and over 91 per cent of workers have returned to work since March 6.
Tesla plans to start building Model Y SUVs in Shanghai from 2021 and expand car parts manufacturing capacity, a government document seen by Reuters showed.
Cui Dongshu, Secretary-General at the China Passenger Car Association (CPCA) said Tesla sold around 3,900 vehicles in February, up from 2,620 vehicles in January.
Tesla’s decision to suspend production at its San Francisco area plant came after several days of discussions with local officials and after the company met on Thursday with the city of Fremont.
California’s governor on Thursday issued a statewide “stay at home” order to residents, telling them to leave their homes only when necessary during the coronavirus pandemic.
The highly contagious respiratory illness has infected more than 10,700 in the United States.
The automaker also said it believed it had enough liquidity to successfully navigate the extended period of uncertainty, with some $6.3 billion in cash at the end of the third quarter, ahead of a recent $2.3 billion capital raise.
The city and officials from the surrounding Alameda County did not immediately respond to a request for comment. — Reuters