Tesla, acknowledging the severity of the coronavirus pandemic, plans to temporarily halt auto production work at its main San Francisco Bay Area plant early next week, after it delayed compliance with strict local “shelter-in-place” rules for nonessential businesses aimed at curbing the spread of COVID-19.
The Alameda County Sheriff’s Department had said this week that Tesla wasn’t an essential business during the crisis and needed to suspend normal operations at its Fremont, California, plant. The company reduced staffing to just 2,500 workers, a quarter of the normal level, but was continuing with some electric vehicle production.
The move came just hours before Governor Gavin Newsom on Thursday ordered all Californians to stay at home to slow the spread of the virus, the first such mandatory restrictions for all 40 million state residents. It’s not clear if Tesla’s March 23 target date complies with the new statewide rules.
CEO Elon Musk has taken to Twitter to sound somewhat skeptical about the severity of coronavirus, saying last week that “coronavirus panic is dumb.” Tesla’s decision to continue building cars, albeit with far fewer workers, was in direct defiance of guidance from local officials whose patience was growing short.
A spokesman for the Alameda Sheriff’s Dept. Sergeant Ray Kelly said that Tesla is still not operating at basic minimum levels. She further added that they are operating at essential levels and need to move to minimum basic.
Tesla shares, along with all U.S. financial markets, have plunged in the past two weeks as the impact of the coronavirus expands, dropping 53% from its record high of USD917.42 on February 19 to USD427.64 on March 19.
Tesla said Thursday that its cash position at the end of 2019’s fourth quarter was USD6.3 billion, ahead of a USD2.3 billion capital raise in February.
The Fremont plant is the only large auto-assembly facility on the U.S. West Coast. It was purchased from Toyota in 2010 and currently builds Model 3 and S electric sedans and Model X and Y crossovers. The company tweeted on Monday that deliveries of the Model Y started this week.
Alameda County, home to Fremont, implemented the shelter in place rules on March 16 along with San Francisco and Santa Clara Counties, effectively preventing most Silicon Valley businesses, excluding grocery stores, pharmacies, medical facilities and other essential services, from continuing normal operations for three weeks.