Tesla tentatively shuts down the Shanghai factory over coronavirus concerns

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Tesla car | iTMunch

Tesla has closed down its Shanghai factory as part of a wider order by the Chinese government to begin the spread of the coronavirus in the area.

The Effects on Profits

The closing that will hold Model 3 production and eventually put slight downward stress on profits in the first quarter, the automaker’s finance chief Zach Kirkhorn stated during an earnings call.

Earlier to the call, Tesla recorded $105 million in net profit, or 56 cents a diluted share, linked with $140 million, or 78 cents a share, in the similar year-ago period.

Tesla made $386 million, or $2.14 a share, in the fourth quarter when modified for one-time items.

Tesla produced revenue of $7.38 billion in the fourth quarter, only 1% higher than the $7.2 billion made in the same period in 2018.

Model 3 production will be paused by a week and a half, Kirkhorn answered.

Novel coronavirus, a unique form of the group of viruses known as coronavirus, first appeared up in Wuhan in late December 2019.

Tesla Shanghai factory closed down temporarily as an effect of Covid-19 | iTMunch

Other Companies That Shut Shop

Hundreds of people have caught the virus, inducing the government to take actions such as shutting down transportation and factories throughout the nation, including Foxconn.

Automakers Ford and Toyota have stated they will evade some of their Chinese assembly factories for an extra week, the NYT published.

Apple CEO Tim Cook mentioned to his investors that its Chinese suppliers are scheduled to remain shut until February 10.

Meantime, Starbucks said that it would momentarily shut down more than 2,000 of its spots in China.

Tesla is further closely observing if the coronavirus will cause delays in the supply chain for cars manufactured in Fremont.

The initial deliveries of Tesla Model 3 sedans manufactured at the Shanghai plant started early in January, one year after the U.S. automaker started construction on its primary factory outside the United States.

The delivery to consumers was a breakthrough for Tesla and a crucial step for the company in its intention to carve out market share in the world’s largest auto market, as well as reduce the economic pain caused by tariffs.

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