After telling employees he’d be coming to work, Tesla CEO Elon Musk is complying with the demand to close the company’s plants.
Tesla bowed to pressure from local authorities, saying it will close its big car plant in Fremont, California, and a second in New York State.
The closures will start March 23, the company said in a release. It did not say when it will reopen the facilities, but most automakers are shutting down for two weeks, pending updated information about the impact of the coronavirus outbreak.
Initially, Tesla tried to circumvent a “shelter in place” order issued by the local officials in the six counties around the Bay area. This includes Alameda County, the East Bay government unit that includes Fremont as well as Oakland and Berkeley.
(Sheriff orders Tesla to close plant as part of shelter-in-place order.)
Tesla will close its plants in California, above, and a smaller site in New York.
“Despite taking all known health precautions, continued operations in certain locations has caused challenges for our employees, their families and our suppliers,” Tesla said in a public statement Thursday. “As such, we have decided to temporarily suspend production at our factory in Fremont.”
Earlier in the week, Elon Musk, Tesla’s co-founder, tweeted he planned to show up for work in defiance of the shelter-in-place order issued by authorities. Tesla executives also argued the Fremont plant was “essential,” but the Alameda County Sheriff’s office issued its own tweet, saying Tesla was considered essential at this point in public-health crisis created by the spread of the coronavirus.
Only pharmacies, gas stations and grocery stores are considered essential businesses under the shelter-in-place order issued by the county government.
In internal statements, Tesla’s executives blamed the confusion in its communications with various officials at the local, state, and federal levels, according to BuzzFeed.
(Shareholder $2.2B lawsuit against Elon Musk postponed due to coronavirus.)
Meanwhile, the Bay Area order has been amplified by an order from the Governor of California, Gavin Newsom, who issued a statewide “shelter-in-place” order that now covers more than 40 million Californians.
Tesla plans to shut the plants down on March 23..
The sheriff’s order is a major blow to Musk and Tesla, which have struggled with financial problems, at a time when the Fremont factory is Tesla’s only significant auto manufacturing facility outside of China. The Chinese plant, which was just beginning to build vehicles, was forced to close last month as part of the Chinese effort to stop the spread of the deadly virus.
The Fremont factory has been building Model 3 vehicles every week and had just begun making the Model Y crossover. However, the company still plans to deliver vehicles during the crisis using a “touchless delivery” system.
“Due to the unique over-the-air connectivity of our vehicles, customers are able to unlock their new cars at a delivery parking lot via the Tesla App, sign any remaining relevant paperwork that has been placed in their car, and return that paperwork to an on-site drop-off location prior to leaving. This method provides additional convenience and comfort,” the company said in the release.
(Tesla CEO Musk looking for a new site for a new U.S. Gigafactory.)
Virtually every other automaker operating in the U.S. has either closed or is the process of closing their plants, including Honda, Toyota and Nissan. In addition, Volkswagen, which tried to re-open its plant in Chattanooga, Tuesday after a two-week shutdown but will now close until April 6.