Essential business? Tesla plant remains open amid coronavirus, raises questions

Andrew Cummings
March 18, 2020

Alameda is one of at least nine counties covered by a "shelter in place" order that limits activity, travel and business functions to only the most essential, and advises people to stay home except for the most crucial reasons.

Local California officials on Tuesday were evaluating if and how Tesla Inc. will be allowed to continue operating its main USA vehicle factory as the San Francisco Bay Area begins a three-week lockdown to rein in the spread of coronavirus. "Tesla can maintain minimum basic operations per the Alameda County Health Order", the spokesman said.

Alameda County officials were determining whether Tesla was in fact able to claim that exemption.

Musk, seemingly underwhelmed by the crisis, told employees that he was unaware of any confirmed cases within the company, and advised employees to stay at home if they're "the slightest bit ill or even uncomfortable". I will personally be at work, but that is just me.

Messages to Tesla representatives seeking comment weren't immediately returned Tuesday night.

Tesla told employees in an email that the company and its suppliers would continue operations supporting the manufacturing and delivery of vehicles, a person who had see the email told Reuters.

The California Department of Public Health rule has said that guidance will be issued in the following days and that California will issue any shutdown guidelines for manufacturing facilities if required.

"The coronavirus panic is dumb", Musk tweeted on March 6.

"My frank opinion remains that the harm from the coronavirus panic far exceeds that of the virus itself". The electric car-maker has said little publicly about how it's handling the virus, in contrast with other automakers and Silicon Valley's leading technology companies.

Tesla Inc.'s (NASDAQ: TSLA) shares dipped in the after-hours session on Tuesday over the possibility that its Fremont factory could be forced to shut down temporarily due to the novel coronavirus (COVID-19) outbreak.

Some employees probably will opt to stay home and assembly lines likely will be slowed, Chris McNally, an analyst at Evercore ISI, wrote in a report. "If there is a massive redirection of medical resources out of proportion to the danger, it will result in less available care to those with critical medical needs, which does not serve the greater good". He assumes Tesla will lose output of as much as 10,000 vehicles and burn through up to $1.2 billion in the first quarter, more than double his original bear-case scenario.

But Musk overall took a more serious tone toward the coronavirus than he did in a March 6 tweet, in which he called fear surrounding the virus "dumb", cautioning Tesla employees to be alert to the dangers of both large and small gatherings.

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