Silicon Valley giant Tesla has decided to temporarily close down factories in two US states after coming under fire over the exposure of its staff to the COVID-19 pandemic.
The firm will “temporarily suspend” production at its Gigafactory 2 solar cell and module plant in Buffalo (New York) and its electric vehicle facility in Fremont (California) over the next few days, according to a statement released by the company this week.
The provisional shutdowns will not be complete at either location, the statement suggests. Buffalo will remain operational “for those parts and supplies necessary for service, infrastructure and critical supply chains” while Fremont will retain certain “basic operations”.
“Despite taking all known health precautions, continued operations in certain locations has caused challenges for our employees, their families and our suppliers,” Tesla’s statement reads, adding that the move to retain partial operations “honours” the directions from the US federal government.
Tesla’s decision to stop production in New York and California – where its motor- and battery-making plant in Nevada will stick to business as usual for now – follows a controversy over its response to COVID-19 in California, so far amongst the US states most affected by the pandemic.
In recent days, US outlets had documented the widespread criticisms over Fremont’s continued operations despite the ‘shelter in place’ orders issued by county authorities. Tesla CEO Elon Musk’s Twitter remarks that “the panic will cause more harm than the virus” had stoked the controversy.
COVID-19 another setback after Panasonic’s Gigafactory 2 exit
The pandemic-driven winddown represents yet another setback for Tesla’s Gigafactory 2 plant, which it had scooped up through the SolarCity takeover in 2016. The project’s key partner, Japanese electronics giant Panasonic, decided last month to pull out from the venture.
The firm recently sought to spread good news about the Buffalo plant; last Sunday, it took to Twitter to report the factory had built 4MW of solar roofs in a week, “enough for up to 1000 [sic] homes”. Last month, it had emerged Panasonic staff at the plant will be assisted by the state to find new jobs.
In its first few months of existence, the escalating COVID-19 emergency has already had several ramifications for Tesla. A high-profile trial over its US$2.6 billion acquisition of SolarCity in 2016 was meant to continue this week but has been postponed, with no new dates yet within sight.
Contacted by PV Tech this week, a spokesperson from the Delaware Court of Chancery confirmed COVID-19 concerns were behind its decision to delay the trial pitting Musk and others at Tesla against a group of shareholders, who allege they were misled over SolarCity’s financial state.
The threat of litigation has coincided with a tanking of Tesla’s solar installations between 2017 (522MW), 2018 (326MW) and 2019 (173MW). The drop has seen the firm give up its spot as the top US residential solar installer, falling behind a bullish Sunrun.
In its statement this week, Tesla explained it held US$6.3 billion in cash at the end of Q4 2019, followed by its recent US$2.3 billion raise. “We believe this level of liquidity is sufficient to successfully navigate an extended period of uncertainty,” the firm said.