Tesla partner Panasonic will pause operations at its Nevada Gigafactory near Reno, Nevada to help curb the continuous spread of the deadly coronavirus.
The company announced Friday that it would slash operations starting next week and then shut down for two weeks. The decision only affects workers at Panasonic. At the so-called Gigafactory 1 in Sparks, Nevada, Tesla also has thousands of employees.
According to The Reno Gazette Journal, Panasonic just reported that it would send home about 3,500 Reno factory employees for 14 days beginning early next week - with pay and benefits.
The Panasonic move is affecting the battery line, while for the time being Tesla employees at the Reno site are continuing to construct power trains and other components for the Model 3 electric car.
An email sent to Panasonic workers said the Gigafactory would start a "sequenced shutdown of production to avert the spread of coronaviru in and around the workplace." It was not clear whether Tesla operations would be affected.
Company spokesperson Alberto Canal said the business will increase cleaning and disinfecting at the factory in the timeframe before closure and introduce social distancing standards to minimize the risk of transmission of viruses.
Gigafactory 1, which broke ground in June 2014, is a key component in Tesla's goal of speeding up the world's transition to renewable energy by increasing global battery capacity and slashing electric vehicle prices. And as a manufacturer and investor in that project Panasonic was the most important partner.
Last month, after "years of struggling to scale up production" at Gigafactory 2 in upstate New York, Tesla and Panasonic scrapped their collaboration in building solar cells.
While Musk was reluctant to cease operations in California, the state is under lockout, car production is not considered an important business, and on March 23 Tesla will stop work at the Fremont factory in California.
The factory will continue temperature monitoring tests over the weekend, with staff or visitors being sent home with fevers over 100.4 degrees.
Tesla could face a bottleneck in the supply chain, without Panasonic. Tesla decided to stop production at its factory in Fremont, California, starting March 23, where it will manufacture Model X, Model S, Model 3 and now Model Y.
Meanwhile, Musk reassures investors that their cash balance was $6.3 billion at the end of the fourth quarter last year, ahead of its recent $2.3 billion capital increase. Tesla said the amount of liquidity is enough to handle a prolonged period of volatility successfully.
