Yes, Even You, Elon: Sheriff Tells Tesla to Halt Fremont Production


Propping up your $900 stock price and cranking out the new Tesla Model Y is not “essential business.” And so the Alameda County Sheriff told Tesla Tuesday to cease operations at its massive Fremont, California, plant outside San Francisco. This a day after Bay Area counties told employers to shut down non-essential businesses and have employees shelter at home for three weeks in the wake of the coronavirus outbreak.

Tesla’s largest factory is in Fremont. It had just begun producing, and shipping, the first Model Y compact SUVs in a manner previously unheard of for Tesla: ahead of schedule.

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Per the tweet Tuesday from Alameda County Sheriff’s office, “Tesla can maintain minimum basic operations.” That would certainly include security at the 370-acre site with 5.3 million square feet of manufacturing and office space – think 50 Home Depots or 100 football fields – plus maintenance staff, and plus a skeleton office staff if they can’t work from home. But it doesn’t include the 10,000-plus workers at the facility, many of whom ride crowded shuttles to remote parking sites. The Los Angeles Times described this scene Tuesday morning at daybreak:

The parking lot was packed to capacity with about 3,000 cars, as dozens of morning-shift workers searched for overlooked spaces. Workers even parked in fire lanes. Dozens of shuttles and full-size buses ferried morning workers to the factory and took night-shift workers away. Departing workers packed shoulder to shoulder at the door of each bus, waiting to get on. The buses take workers to offsite lots and as far away as Tracy and Stockton.

There had been confusion Monday night when Alameda County spokesman Ray Kelly said Tesla qualified as an “essential business.” Twenty-four hours later, Kelly flipped and said while he believed that to be true Monday – probably meaning someone above him believed that to be the case – “Tesla is not an essential business as defined in the Alameda County health order.”

Replying to the Sheriff’s closure order: the wit and wisdom of the twitterverse.

Naturally, this wouldn’t be Tesla without drama and virtual fistfights online. Above is a selection of comments on the stop-production order, saying, for instance, that some vocal proponents of stopping Fremont production are short-sellers of Tesla stock (who make money if it goes down) … that it’s not clear what’s a basic minimum operation (see below) … and that Tesla workers are left in the dark.

As in many areas that have either ordered or urged non-essential businesses to close, the exceptions include, per the Alameda County order:

  • Healthcare operations (obviously)
  • Businesses provide food, shelter (as opposed to a tax shelter), social services
  • “Necessities of life” for the poor or needy
  • Sellers of both fresh and non-perishable foods including 7-Eleven type stores
  • Gas stations, banks, cleaners
  • “Businesses and services necessary for maintaining the safety, sanitation and essential operation of a residence.”

What other car-related businesses are exempted? “Gas stations and auto-supply, auto-repair, and related facilities.” Automobile manufacturing is not. The Fremont plant makes the Model 3, Model X, Model S, and now the Model Y compact SUV.

Tesla shocked the world by announcing that not only it would ship the Model Y on time but that the first cars were being delivered to the first-in-line customers (Tesla employees) this week, almost a half-year ahead of schedule. The company was obviously hoping to produce more of everything but especially the Model Y. Tesla has been hoping to produce a half-million cars in 2020.

Easy come, easy go: Tesla stock this week is trading at 40% of its peak value, $969, a month ago when the company was worth $140 billion (chart: NASDAQ/Google)

Tesla is mostly about cars, electrification, and the triumph of technology. But it’s also about stock price. Tesla earlier this soared to as much as $969 a share last month and a market cap (capitalization, the stock price multiplied by the number of shares held by investors) of more than $175 billion, more than the value of GM, Ford, and the USA parts of Fiat Chrysler.

Even as the stock market as a whole suffered the fastest major correction (read: precipitous fall) in history in the span of a few days, things have been even tougher if you held TSLA. Shares are down about 60 percent from their peak in February 2020. Anyone who bought Tesla stock before late December (at around $400) is still above water. People who bought since then have problems.

In spite of this, Tesla’s future seems bright: In the US where 70 percent of new car sales are non-sedans, the Model Y could become Tesla’s biggest seller, since it’s an SUV where the current best-seller Model 3 is a sedan. Additionally, investors who want the purest stock market play on battery electric vehicles have turned to Tesla, since that’s all they make: EVs.

Or this week, EVs are all they’re not making.

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