Tesla will temporarily shut down its car manufacturing plant in Fremont, California, beginning at the end of Monday, March 23, joining almost every other major car company to suspend its US operations due to the coronavirus crisis.
The company, which in spite of a local shelter-in-place order had kept its Fremont factory running, said it would stop producing cars there after the said date. Also halting production will be Tesla's plant in Buffalo, New York, which produces solar power devices.
Shares of the company dropped around 9 per cent on the news after hours. In an email to CNBC workers, Tesla Head of Human Resources for North America Valerie Workman said the facilities would transition to "minimum operations to support vehicle and energy operations, and supercharging infrastructure as directed by authorities" starting March 24.
Even after the issuance of a shelter-at-home directive which extended to businesses and individuals, the carmaker had caused uproar by continuing operations at its key production lines. Tesla was not defined as an "essential company" that would have exempted it from the order.
The organization was telling staff they could stay home as recently as Wednesday if they were concerned about the coronavirus outbreak but would have to use their time off if they wanted to get paid.
Despite the outage Tesla will continue to make product deliveries. The company disclosed that it was leveraging the mobile accessibility of its app and customer cars to roll out "touchless delivery" in major areas to help minimize the spread of the virus.
According to Tesla, customers can unlock their new vehicles at a delivery parking lot using the Tesla App for the touchless delivery system, sign any remaining related document that has been put in their vehicle, and return it to a drop-off point on site before leaving. Just about 2,500 of the 10,000-person workers at the Tesla factory were still turning up at the Fremont plant by Wednesday.
Nevertheless, other Tesla facilities will continue operations, including the Gigifactory in Nevada, which manufactures batteries and battery packs. Work will also continue to manage Tesla's charger network, the firm said in its announcement.
The electric car maker thinks it has ample cash on hand to get through this temporary closure. At the end of the fourth quarter of 2019 the firm said it had a cash balance of $6.3 billion before the posting of its latest $2.3 billion capital report. Tesla also said at the end of the fourth quarter of 2019, it had around $3 billion in available lines of credit.
