The World Health Organisation had called global government of health emergency amid the Coronavirus pandemic originating from China with more than 34,000 people affected. While the country is trying all its possible best to combat the deadly virus by building hospitals and even deploying robots to assist medical professionals at the front line, many companies including Apple as well as Tesla’s Shanghai Gigafactory were also closed since the 29th of January and even transportation from some provinces such as Wuhan, the Battlefield is on a total lockdown.
The latest we heard based on reports from Reuters via Electrek is that Tesla wants to reopen its factory tomorrow 10th of February after almost 2 weeks of lockdown and its being reported that the Shanghai government wants to help the company get back to work doing what it’s known for.
While the coronavirus continues to spread like wildfire with some 35,000 people said to have contracted the virus while a total of 700 people were reported to have been killed by the deadly virus, nearly 2,400 people have been reported to have recovered from the attacks. The virus caused a global fear worldwide with the US Disease control center declaring it as health emergency while other nations around the world seek to curb the disease by using hightech measures to examine people coming into their territories.
One way to keep everyone safe is to reduce human interaction as much as possible which had led the Chinese government to shut down activities within majority of country such as transportation and factory lockdown and even the deployment of robots for delivery and nursing patients in quarantine.
Tesla’s Shanghai Gigafactory is also affected by this lockdown which is part of what had caused a big delay to the delivery of the Model 3 in China on Wednesday.
Previously the company had warned, during their Q4 results call, that the Shanghai factory ramp would be delayed by 1 to 1.5 weeks. CFO Zach Kirkhorn said this on the call:
At this point, we’re expecting a 1 to 1.5 week delay in the ramp of Shanghai built Model 3 due to a government required factory shutdown. This may slightly impact profitability for the quarter, but is limited as the profit contribution from Model 3 Shanghai remains in the early stages. We are also closely monitoring whether there will be interruptions in the supply chain for cars built in Fremont. So far we’re not aware of anything material, but it’s important to caveat that this is an evolving story. However, we have more than sufficient cash to continue our expansion plans, while further strengthening the balance sheet.
Telsa CFO, Zach Kirkhorn
The deliveries of the Model 3 started last month while the company had announced that the Shanghai factory has a capacity of about 150,000 cars manufacturing by the fourth quarter of 2020. But the 1.5 weeks of not being in action wills et the production back à little bit which might reduce those numbers somehow.
As the Shanghai Gigafactory is scheduled to be opened tomorrow, February 10th, this company seek to get back to action and continue its production to meet up with the already delayed scheduling of the Model 3 it was supposed to have started delivering.
While it’s not Tesla’s Gigafactory that’s been shut down in Shanghai, other supplier factories have been on lockdown which might also have negative effect on the number rof outputs of Tesla even when it reopens for operation tomorrow.
But the Government of Shanghai had offered to help not only Tesla but other factories get back to their feet in order to continue productions at a fast pace as possible.
Parts of what the government seeks to do includes giving out loans at a preferential rates and some exemptions from value-added tax for certain sectors. This aid won’t be limited to local companies but also foreign companies among which is Tesla and a host of others.
Shanghai’s government spokesman Xu Wei made this known in a statement
In view of the practical difficulties key manufacturing firms including Tesla have faced in resuming production, we will coordinate to make all efforts to help companies resume production as soon as possible
Tesla on the other hand might not really want to land itself in some unnecessary debt considering the fact that it still wallows in some tons of cash which might mean defying the loan offers.
But it might still be a positive news to Tesla as its suppliers might be needing this cash to get back right on their feet since nearly mahor production companies always rely on other smaller suppliers who make modules or components that makes their products work better.
While the Chinese government continues to fight back against the deadly CoronaVirus throughout the country, Tesla hopes to recover those few days it left without without working in order to meet up with its milestone by Q4 2020.