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Tesla hits reverse on plan to reopen its auto factory this week

Tesla has reversed a plan to reopen parts of its California auto factory on Wednesday, April 29.

News earlier this week that the electric-car maker was planning to restart its plant in Fremont, California, came as a surprise as the region remains under a stay-at-home order due to the coronavirus.

But an internal message received by workers at the factory revealed Tesla has gone back on its plan to resume operations at its factory this week.

The message, obtained by CNBC, said: “Per the direction of the executive leadership team, we will not be returning to work Wednesday, April 29. Please disregard all communication and directives on returning to work this week.”

The decision to delay a return to work is likely to have been prompted by an announcement from the local authority on April 27 extending the stay-at-home order from May 3 until May 30.

The extension affects Alameda County, which is home to Tesla’s Fremont factory, and five other counties in Northern California.

Tesla’s auto factory — it’s only one in the U.S. — employs 10,000 people and manufactures the company’s Model S and Model X vehicles, as well as its newer Model 3 and Model Y vehicles for the North American and European markets. The new Model Y crossover had just started to roll off the production line when the original stay-at-home order was enacted in mid-March.

At the time, Tesla sought to keep its production line running in defiance of the order, which asked for all non-essential businesses to suspend operations. But the office of the Alameda County Sheriff stepped in, pointing out that the car company was not an essential business. Days later, on March 24, Tesla relented and stopped its production line, sending its workers home.

With COVID-19 prompting the temporary closure of numerous car factories around the world, this is proving a challenging time for the entire industry. According to Credit Suisse analysts, Tesla’s suspension of operations is causing the company around $300 million of cash burn per week.

We’ve reached out to Tesla for more information on its latest decision to cancel a restart and we will update this piece when we hear back.

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