Tesla will suspend production at its Fremont, Calif., factory beginning March 23, days after a shelter in-place order went into effect in Alameda County due to the COVID-19 pandemic and sparked a public tussle between the automaker and local officials over what was consider an “essential” business.
Tesla will also suspend operations at its factory in Buffalo, New York except for “those parts and supplies necessary for service, infrastructure and critical supply chains,” the company said in a statement.
Meanwhile, the company’s massive factory near Reno, Nevada is operational as usual. The Nevada gigafactory, as Tesla describes it, employs thousands of people who produce electric motors for the Model 3 and battery packs for its portfolio of electric vehicles.
Tesla believes it has enough liquidity to weather the shutdown caused by the COVID-19 pandemic. Its cash position at the end of the the fourth quarter was $6.3 billion before its recent $2.3 billion capital raise.
“We believe this level of liquidity is sufficient to successfully navigate an extended period of uncertainty,” Tesla said.
The company had available credit lines worth about $3 billion, including working capital lines for all regions as well as financing for the expansion of its Shanghai factory at the end of the fourth quarter of 2019.
Here’s a portion of the statement:
In the past few days, we have met with local, state and federal officials. We have followed and are continuing to follow all legal directions and safety guidelines with respect to the operations of our facilities, and have honored the Federal Government’s direction to continue operating. Despite taking all known health precautions, continued operations in certain locations has caused challenges for our employees, their families and our suppliers.
As such, we have decided to temporarily suspend production at our factory in Fremont, from end of day March 23, which will allow an orderly shutdown. Basic operations will continue in order to support our vehicle and energy service operations and charging infrastructure, as directed by the local, state and federal authorities. Our factory in New York will temporarily suspend production as well, except for those parts and supplies necessary for service, infrastructure and critical supply chains. Operations of our others facilities will continue, including Nevada and our service and Supercharging network.
Tesla also said that it will start “touchless deliveries” in many locations to allow customers to take delivery of their vehicle “in a seamless and safe way.”
The vehicles will be placed in a delivery parking lot. Customers will be able to unlock the vehicles using the Tesla app and then sign the remaining paperwork necessary to take ownership. Customers will need to return that paperwork to an on-site drop-off location prior to leaving.
