Tesla shutting down Fremont plant March 23 after mounting criticism

Tesla’s Fremont plant had been running with reduced staffing.


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After a protracted and cloudy back-and-forth battle about whether to close the Tesla plant, Tesla announced today that it will close its Fremont, California, factory on March 23 in acknowledgement of the coronavirus crisis. CEO Elon Musk’s electric car plant had been continuing production with a reduced staff and increased safety measures, but the company will now follow the lead of most other automakers in the US by temporarily shuttering the plant.

Musk and Tesla leadership had come under widespread criticism from government officials, industry watchdogs and many consumers for attempting to keep production humming in the face of Alameda County’s COVID-19-induced “shelter in place” order.

This will-they, won’t-they saga has vacillated dramatically over the last 24 hours.

On Tuesday, it was initially reported that Tesla wouldn’t be subjected to the shelter-in-place order designed to keep residents inside their homes with travel exceptions only made for essential excursions such as to secure food and medicine. 

However, the Alameda County Sheriff’s Department shortly thereafter issued a statement proclaiming Tesla “is not an essential business as defined in the Alameda County Health Order. Tesla can maintain minimum basic operations per the Alameda County Health Order.”

Confusingly, a county spokesperson previously told the Los Angeles Times that the Tesla factory had been granted an exemption from the order.

Then came an email statement obtained by CNBC attributed to Tesla’s head of human resources. The communique to all employees stated, Tthere are no changes in your normal assignment and you should continue to report to work if you are in an essential function.” The “essential function” portion mentioned production, service, deliveries and testing, among other activities. 

Elon Musk has been outspoken on coronavirus-related matters on Twitter.

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The automaker’s HR boss cited “conflicting” guidance from various levels of government for the drama, and the note said Tesla was awaiting final word from relevant city, county, state and federal authorities. Pending those directives, the email said employees were free to work as long as they felt comfortable. (The company also pledged not to discipline workers who chose not to report to work, or who cited absence due to illness.)

Most recently, Tesla was reportedly granted the ability to continue staffing its Fremont factory with 2,500 workers — roughly a quarter of the facility’s employees. 

The shutdown order comes at a pivotal time for Elon Musk and co., as deliveries have just been getting underway for the company’s important new Model Y electric SUV. Back in late January, Tesla was also forced to temporarily close its new Shanghai assembly plant as the coronavirus enveloped China. That plant had just started to deliver Model 3 sedans to local customers.

After initially calling the ramping panic over the coronavirus “dumb” on social media on March 6, Musk has shown select signs he is starting to take COVID-19 more seriously. Earlier today, the enigmatic executive said he would be willing to join the raft of automakers investigating production of medical ventilators seen as key to fighting coronavirus. However, that exchange came on the heels of a tweet reply in which Musk said, “Exactly. My guess is that the panic will cause more harm than the virus, if that hasn’t happened already.”

According to Tesla’s statement announcing the factory shutdown, “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.” It is not clear how many employees will be involved — or permissible — in these activities.

In that same statement, Tesla also announced that the company has begun undertaking “touchless deliveries” at “many locations” for customers who still wish to pick up their vehicle during this period where social distancing is advised:

Due to the unique over-the-air connectivity of our vehicles, customers are able to unlock their new cars at a delivery parking lot via the Tesla App, sign any remaining relevant paperwork that has been placed in their car, and return that paperwork to an on-site drop-off location prior to leaving.

Tesla did not immediately return a request for comment on this story. We will update it if and when we hear back.

This story is developing…

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