Tesla (NASDAQ:TSLA) made a lot of news on Thursday as the markets continued to reel from the ever-spreading coronavirus. For one, Elon Musk said that his company would help produce ventilators for hospitals and healthcare groups should there be a shortage, something that’s definitely a possibility. However, the company also announced that they would be shutting down some of their facilities as due to the coronavirus.
Employees at the facilities getting shut down will still receive paid leave during the halted operations. Many companies, including Tesla, have encouraged their employees to work at home, if at all possible. What the company will keep running, however, are its basic services, such as maintaining its charging infrastructure. Not all factories will be shut down, as Nevada’s factory will remain operational as normal despite the state’s governor calling for all nonessential businesses to shutdown.
“We have decided to temporarily suspend production at our factory in Fremont, from end of day March 23, which will allow an orderly 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. Our factory in New York will temporarily suspend production as well, except for those parts and supplies necessary for service, infrastructure and critical supply chains,” read an official press release from Tesla.
Tesla wasn’t the only company to promise to produce ventilators. The majority of the U.S. auto industry made a similar offer earlier today, promising to retool their factories to produce ventilators instead of cars. A similar trend can be seen across the Atlantic Ocean, with the U.K. having asked Rolls-Royce and Jaguar to produce ventilators for the government. While the U.S. healthcare system can handle the current number of outbreaks, this isn’t expected to last for long as the number of coronavirus cases is expected to spike.
Shares of Tesla are up 22% over the course of the day following the news, although shares had initially slumped a bit. While the automaker has staged a triumphant recovery in 2019, proving naysayers wrong as the stock surged to new heights, shares have lost around half their value over the past month or so. This is in line with the rest of the markets more or less, with the Dow Jones declining by around 35% over the past four weeks. Coronavirus fears are likely to remain a big issue for the global economy, and it’s uncertain how Tesla will be able to handle this situation going forward.
Tesla Company Profile
Founded in 2003 and based in Palo Alto, California, Tesla is a vertically integrated sustainable energy company that also aims to transition the world to electric mobility by making electric vehicles. It sells solar panels and solar roofs for energy generation plus batteries for stationary storage for residential and commercial properties including utilities. The Tesla Roadster debuted in 2008, Model S in 2012, Model X in 2015, Model 3 in 2017, and Model Y in 2020. Global deliveries in 2019 were 367,656 units. Tesla went public in 2010 and employs about 50,000 people. – Warrior Trading News
