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Tesla suspends production at U.S. vehicle factory due to coronavirus

Tesla suspends production at U.S. vehicle factory due to coronavirus

(Reuters) – Tesla Inc on Thursday ended a standoff with native California authorities involved concerning the unfold of the coronavirus, saying it is going to droop production at its San Francisco Bay Area vehicle factory on March 24.

The firm mentioned its New York photo voltaic roof tile factory will even briefly droop production, whereas operations at its Nevada battery plant will proceed.

“Despite taking all known health precautions, continued operations in certain locations has caused challenges for our employees, their families and our suppliers,” the corporate mentioned in a press release.

Tesla’s shares have been down eight% in after-hours buying and selling following the announcement.

The determination to droop 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 predicted to be increased than for all of Tesla’s different fashions mixed, Chief Executive Elon Musk has mentioned.

Musk on Thursday tweeted that Tesla’s China operations have been operating “normally across hundreds of suppliers & all of Tesla Shanghai.” The Shanghai factory is vital to Tesla’s development technique and the corporate plans to broaden automotive production capability there.

Tesla’s determination to droop production got here after a number of days of discussions with native officers and after the corporate met on Thursday with the town of Fremont.

The extremely contagious respiratory sickness has contaminated greater than 10,700 within the United States.

The view of Tesla Inc’s U.S. vehicle factory which is open for enterprise, regardless of an order by the Alameda county’s sheriff’s workplace to adjust to a three-week lockdown within the San Francisco Bay Area, so as to rein within the unfold of coronavirus illness (COVID), in Fremont, California, U.S., March 18, 2020. REUTERS/Shannon Stapleton

The automaker additionally mentioned it believed it had sufficient liquidity to efficiently navigate the prolonged interval of uncertainty, with some $6.three billion in money at the tip of the third quarter, forward of a current $2.three billion capital increase.

The metropolis and officers from the encircling Alameda County didn’t instantly reply to a request for touch upon Thursday.

Alameda County is one in all six counties lined by an order from regional officers to “shelter in place,” which limits exercise, journey and enterprise features to solely essentially the most important, and advises individuals to keep residence aside from essentially the most essential causes.

The county sheriff’s workplace mentioned on Tuesday afternoon Tesla was not thought of a necessary enterprise and can’t proceed to function its factory usually.

Tesla mentioned on Thursday it might proceed fundamental operations at the Fremont factory in compliance with the order to help vehicle and vitality companies and charging infrastructure.

Tesla’s sole U.S. auto factory employs greater than 10,000 staff, with annualized production of barely greater than 415,000 items by the tip of December 2019.

In an electronic mail to staff on Thursday, Tesla mentioned operations at the Fremont plant will transition to “minimum basic operations” starting on March 24.

Employees at the California and New York factories might be supplied with paid go away throughout suspended operations, the e-mail mentioned.

Slideshow (three Images)

Tesla’s Giga factory in Nevada, which employs round 7,000 individuals, produces battery packs for its electrical autos and stationary storage techniques.

The firm’s Buffalo, New York, plant produces the corporate’s photo voltaic roof tiles in addition to some Supercharger and vitality storage elements. It has greater than 1,500 jobs within the metropolis of Buffalo, the corporate mentioned final month.

U.S. automakers Ford Motor Co, General Motors Co and Fiat Chrysler Automobiles NV, on Wednesday mentioned they have been shuttering their U.S. crops, in addition to factories in Canada and Mexico, to cease the unfold of coronavirus.

Reporting by Tina Bellon in New York; Additional reporting by Nichola Groom in Los Angeles; Editing by Tom Brown and Matthew Lewis

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