Tesla will temporarily shut down its car manufacturing plant in Fremont, California, starting at the end of Monday, March 23rd, joining nearly every other major automaker in suspending its US operations due to the effects of the coronavirus pandemic. The announcement comes after days of back-and-forth with the local authorities about whether the company was exempt from a recent shelter-in-place order in the San Francisco Bay Area. Tesla will also suspend most operations at its solar panel factory in Buffalo, New York.
“Despite taking all known health precautions, continued operations in certain locations has caused challenges for our employees, their families and our suppliers,” the company wrote in a press release. “As such, we have decided to temporarily suspend production” at both factories.
Hourly employees at both factories will “continue to receive their normal pay through Monday, after which point we will provide paid leave during suspended operations,” according to an email from the company’s regional HR boss Valerie Workman viewed by The Verge. “Those who have been working from home should continue to do so and consider it business as usual. We understand you will have many questions and we will be providing you with additional resources in the coming hours and days,” Workman wrote.
Tesla says it will keep some “basic operations” up and running, like work on its charging infrastructure. The company’s Gigafactory in Nevada will continue as normal, despite a recent initiative from the state’s governor asking all nonessential businesses to close.
Tesla will keep making vehicle deliveries during the shutdown. The company says it is leveraging its app and its cars’ smartphone connectivity to implement “touchless deliveries” in “many locations” to help mitigate any spread of the virus. With the touchless deliveries, “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,” the company says.
The leaders of six counties across the San Francisco Bay Area announced the shelter-in-place order on Monday, and as part of it, told all “nonessential businesses” to close down. But Tesla kept its car factory open, despite not seeming to fit the order’s definition of an “essential business.”
Late Tuesday evening, the Alameda County Sheriff’s Office announced that it believed Tesla was “not an essential business,” and said the company should scale back to the most basic operations, like payroll. Tesla’s factory remained open, though.
Workman told employees that it was because the company had been told it was considered “national critical infrastructure” by the Department of Homeland Security, though the government agency has not responded to multiple requests to confirm this. Guidance issued by its Cybersecurity and Infrastructure Security Agency on Thursday did not list automotive manufacturing among a list of “critical infrastructure.”
On Thursday, the local police department tweeted that the police chief and members of the city’s management team was scheduled too meet with “Tesla Factory management” to “discuss cooperation for compliance with the County Health Officer’s Order.” Just a few hours later, Tesla announced the factory closure.
Tesla said Thursday that it believes the $6.3 billion in cash it had at the end of 2019, as well as the $2.3 billion it raised in February, will be “sufficient to successfully navigate an extended period of uncertainty.”
Two employees at the California factory have told The Verge things already felt pretty uncertain this week as Tesla negotiated the immediate fate of the factory with local authorities. One shared screenshots of messages from coworkers who were worried they were feeling symptoms of COVID-19, the disease caused by the coronavirus, but felt they had no way to get tested.