- Tesla’s Fremont factory can no longer manufacture cars after it was deemed to be a non-essential business by Alameda County.
- Tesla’s share price dropped by more than 10% on the news. Tesla is now trading below $400 a share, effectively wiping out the bulk of the gains the stock enjoyed over the previous few weeks.
- As the coronavirus continues to spread, Tesla CEO Elon Musk this week reiterated his belief that the panic surrounding the coronavirus is worse than the virus itself.
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Over the past few months, Tesla shares embarked on a meteoric and somewhat unprecedented rise. Consider this: Tesla shares in late November were trading at $328 a share. Not even three months later, Tesla stock price hit $917 on February 19th. Now, just about one month later, the bulk of Tesla’s gains have all but vanished due to concerns surrounding the rapid spread of the coronavirus.
Today, Tesla shares are trading in the $380 range, with the stock falling by more than 10% after Tesla’s factory in Fremont was deemed to be a non-essential business. While it was initially assumed that Tesla could keep vehicle production going, that is no longer the case. Incidentally, the Tesla factory shutting down comes just about one week after Tesla manufactured its one-millionth car, a milestone Elon Musk celebrated on Twitter last Tuesday.
While Tesla can maintain “minimum basic operations” at its Fremont factory, that doesn’t include vehicle production. In effect, Tesla for the foreseeable future will not be able to manufacture any new Model S, Model X, Model Y, and Model 3 vehicles in the United States.
Per the Alameda County Public Health Department, minimum basic operations encompass the following:
For the purposes of this Order, “Minimum Basic Operations” include the following, provided that employees comply with Social Distancing Requirements as defined this Section, to the extent possible, while carrying out such operations:
i. The minimum necessary activities to maintain the value of the business’s inventory, ensure security, process payroll and employee benefits, or for related functions.
ii. The minimum necessary activities to facilitate employees of the business being able to continue to work remotely from their residences.
As of now, Elon Musk hasn’t commented on the Tesla factory in Fremont closing, but it’s safe to assume that he’s none too thrilled given that he thinks the hysteria surrounding the coronavirus is overblown. Recall, Musk a few days ago went on Twitter and said that coronavirus panic is dumb. And just this week, Musk sent out an internal memo to Tesla employees where he said that the panic surrounding the coronavirus is worse than the virus itself.
“My frank opinion,” Musk said, “remains that the harm from the coronavirus panic far exceeds that of the virus itself. 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.”
For what it’s worth, Musk made a point of noting that no one at Tesla had yet to test positive for the virus.