Tesla Plans to Halt U.S. Car Production Over Coronavirus - Barron's

Elon Musk, founder of SpaceX and chief executive officer of Tesla

Photograph by Andrew Harrer/Bloomberg

Tesla will halt production at its Fremont, Calif., facility, after all. Shares of the electric vehicle maker (ticker: TSLA) were down 7% after the market closed, paring back some of its 18.4% gains from Thursday’s session.

In a filing, the company said its cash position at the end of the fourth quarter was $6.3 billion. That doesn’t include the company’s timely $2.3 billion capital raise in February.

“We believe this level of liquidity is sufficient to successfully navigate an extended period of uncertainty,” the company said. Tesla said that at the end of the fourth quarter of 2019, it had available credit lines worth about $3 billion “including working capital lines for all regions as well as financing for the expansion of our Shanghai factory.”

The company will temporarily suspend production at the end of the day on March 23. Basic operations will continue to support the company’s vehicle and energy service operations and charging infrastructure.

The New York facility will suspend production, too, aside from parts and supplies necessary for service, infrastructure, and critical supply chains, the company said. Operations will continue at its Nevada battery facility and throughout its service and Supercharging network.

Tesla is also implementing what it calls “touchless deliveries,” where customers unlock their cars at a delivery parking lot, sign relevant paperwork placed on their car, return the paperwork in a drop-off location, and drive away.

Fiat Chrysler Automobiles, Ford Motor, and General Motors have all announced temporary shut down plans. The latter two told Barron’s they are exploring ways to help fight Covid-19, including possibly producing much-needed ventilators.

CEO Elon Musk drew criticism online for seeming to down play covid-19, calling the panic surrounding the disease “dumb,” on March 6. Since then many local governments have taken serious precautions, shutting down dine-in restaurants and encouraging Americans to stay indoors to slow the spread and reduce the strain on hospitals.

On Thursday, Musk said his company is looking into producing ventilators, though he added on Twitter such moves come “even though I think there will not be a shortage by the time we can make enough to matter.”

Write to Connor Smith at connor.smith@barrons.com

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