Tesla relents and shuts Fremont plant in response to coronavirus crisis

Tesla’s efforts to keep its only U.S. auto factory open in the face of the coronavirus pandemic have faltered after Elon Musk’s electric-car company finally agreed to halt its production line next week.

Earlier in the week, Tesla appeared determined to keep the 10,000-worker factory open despite the recently announced shelter-in-place orders for seven counties in the Bay Area, including Alameda County where the factory is located. The drastic measure, which will be in place for at least three weeks, shuttered most businesses and orders people to stay indoors except for essential travel. It’s one of a growing number of U.S. lockdowns aimed at slowing the spread of the coronavirus, formally known as COVID-19.

After discussing the matter with local, state, and federal officials, Tesla finally relented and has agreed to send its workforce home. In a release posted online on Thursday, March 19, the company said it had decided to temporarily suspend production at its Fremont factory starting March 24, though “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.”

Tesla said its New York Gigafactory, which produces lithium-ion battery cells, will also suspend production, though its Nevada Gigafactory will remain up and running.

Tesla turnaround

Last week, Tesla seemed bent on keeping its Fremont factory open, despite the issuance of the shelter-at-home order instructing nonessential businesses to close. Musk even told workers in an email that he planned to continue to work, though added, “I’d like to be super clear that if you feel the slightest bit ill or even uncomfortable, please do not feel obligated to come to work … Totally OK if you want to stay home for any reason.”

Following a tweet from the Alameda County Sheriff’s office pointing out that Tesla’s factory is not an essential business, and therefore should suspend operations, the automaker sought to convince the authorities by announcing plans to take employees’ temperatures before entering the factory, as well as issuing masks and asking workers to keep as much space as possible between one another. But it wasn’t enough.

The decision by Tesla to suspend operations at its factory follows similar moves by automakers around the world, with Ford, General Motors, and Honda, among others, recently announcing temporary closures of factories in North America and Europe as part of efforts to slow the spread of the virus by keeping workers at home. Some automakers linked the closures to a fall in demand, while others said they would use the downtime to perform a deep clean of their facilities.

Updated on Thursday, March 19, 2020: On Thursday, California imposed a statewide lockdown, ordering its 40 million residents to stay at home except for essential activities.

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