Transportation

Tesla to temporarily shut down Fremont factory

Comment

Signage stands outside a Tesla Motors Inc. auto plant.
Image Credits: Tony Avelar / Getty Images

Tesla will suspend production at its Fremont, Calif., factory beginning March 23, days after a shelter in place order went into effect in Alameda County due to the COVID-19 pandemic that sparked a public tussle between the automaker and local officials over what was considered an “essential” business.

Some basic operations that would support Tesla’s charging infrastructure and what it describes as its “vehicle and energy services operations” will continue at the factory, which under normal circumstances employs more than 10,000 people.

Tesla will also suspend operations at its factory in Buffalo, N.Y., except for “those parts and supplies necessary for service, infrastructure and critical supply chains,” the company said in a statement.

Tesla could not be reached for comment. TechCrunch will update the story if the company responds.

The Alameda County Sheriff also confirmed the announcement, noting in a tweet that Tesla would suspend production during the health order and that minimum basic operations are permitted.

Meanwhile, the company’s massive factory near Reno, Nev. is still open and operational as usual. The Nevada gigafactory, as Tesla describes it, employs thousands of people who produce electric motors for the Model 3 and battery packs for its portfolio of electric vehicles. People familiar with operations at the gigafactory told TechCrunch that managers are monitoring the situation closely.

Tesla said it has enough liquidity to weather the shutdown caused by the COVID-19 pandemic. Its cash position at the end of the fourth quarter was $6.3 billion before its recent $2.3 billion capital raise.

“We believe this level of liquidity is sufficient to successfully navigate an extended period of uncertainty,” Tesla said.

The company had available credit lines worth about  $3 billion, including working capital lines for all regions as well as financing for the expansion of its Shanghai factory at the end of the fourth quarter of 2019.

The announcement caps an uncertain week that began March 16 after Alameda County ordered all nonessential businesses to close, including bars, gyms and dine-in restaurants because of the global spread of COVID-19, a disease caused by the coronavirus. Tesla’s factory and a number of its other facilities are located in and around Fremont, which is within Alameda County.

Tesla kept the Fremont factory open despite the order, claiming that part of the company’s operations fell under an exemption in the county’s order. Tesla CEO Elon Musk told employees in an email that the company would continue operations at the Fremont factory, where the automaker assembles the Model S, Model X, Model 3 and now Model Y electric vehicles. Musk did tell employees they should not feel obligated to come to work if they “feel the slightest bit ill or even uncomfortable.”

The Alameda County Sheriff disagreed, and on March 17 tweeted that Tesla was not “essential.” The automaker still ignored the order and the sheriff’s tweet. On Wednesday, employees received another email from human resources head Valerie Workman that the Fremont, Calif., factory was still open for production, because it has had “conflicting guidance from different levels of government.”

The email told employees to come to work if their job is to produce, service, deliver or test its electric vehicles. Another email sent late Wednesday evening (and viewed by TechCrunch) reiterated to employees that the factory would remain open to “essential” workers, but special efforts were being taken to lessen the spread of COVID-19, including handing out masks to be worn throughout the day, taking temperatures prior to entry, adding more hygiene stations inside the facility, rearranging operations to promote social distancing as much as possible and increasing cleaning frequency of all work areas.

Here’s a portion of the statement:

In the past few days, we have met with local, state and federal officials.  We have followed and are continuing to follow all legal directions and safety guidelines with respect to the operations of our facilities, and have honored the Federal Government’s direction to continue operating.  Despite taking all known health precautions, continued operations in certain locations has caused challenges for our employees, their families and our suppliers.

As such, 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. Operations of our others facilities will continue, including Nevada and our service and Supercharging network.

Tesla also said that it will start “touchless deliveries” in many locations to allow customers to take delivery of their vehicle “in a seamless and safe way.”

The vehicles will be placed in a delivery parking lot. Customers will be able to unlock the vehicles using the Tesla app and then sign the remaining paperwork necessary to take ownership. Customers will need to return that paperwork to an on-site drop-off location prior to leaving, Tesla said.

Workers prep for deliveries

As Tesla winds down the Fremont factory, the activity is shifting to its delivery operations. Tesla has a history of stacking deliveries at the end of a quarter. And this one is no different, COVID-19 or not.

Current Tesla employees have told TechCrunch that communication about operations in California, one of its biggest markets, has been inconsistent and unclear as the COVID-19 pandemic has spread. Employees, who requested anonymity for fear of losing their jobs described a lack of access to disinfectant, and said there were not clear or proper protocols put in place to safeguard workers in sales, service and delivery.

The lack of guidance for Tesla employees who work in delivery and sales throughout the U.S. has prompted some to take matters into their own hands because there is “zero protective gear.”

Employees told TechCrunch there is no disinfectant or gloves for delivery drivers, service or sales staff at some of its busiest delivery hubs. There has been little communication with upper management even as they prepared for an onslaught of vehicles before the quarter ends. For instance, employees were told to expect 1,000 cars in Costa Mesa alone in the next three days. Other delivery hubs are expected to be busy as well.

The touchless delivery system began Wednesday in places like Costa Mesa. Some employees are worried about the risk of exposure to COVID because customers are still walking into locations because touchless delivery isn’t possible in all cases because of trade-ins and other reasons, such as financing.

More TechCrunch

Meta’s Oversight Board has now extended its scope to include the company’s newest platform, Instagram Threads, and has begun hearing cases from Threads.

Meta’s Oversight Board takes its first Threads case

The company says it’s refocusing and prioritizing fewer initiatives that will have the biggest impact on customers and add value to the business.

SeekOut, a recruiting startup last valued at $1.2 billion, lays off 30% of its workforce

The U.K.’s self-proclaimed “world-leading” regulations for self-driving cars are now official, after the Automated Vehicles (AV) Act received royal assent — the final rubber stamp any legislation must go through…

UK’s autonomous vehicle legislation becomes law, paving the way for first driverless cars by 2026

ChatGPT, OpenAI’s text-generating AI chatbot, has taken the world by storm. What started as a tool to hyper-charge productivity through writing essays and code with short text prompts has evolved…

ChatGPT: Everything you need to know about the AI-powered chatbot

SoLo Funds CEO Travis Holoway: “Regulators seem driven by press releases when they should be motivated by true consumer protection and empowering equitable solutions.”

Fintech lender SoLo Funds is being sued again by the government over its lending practices

Hard tech startups generate a lot of buzz, but there’s a growing cohort of companies building digital tools squarely focused on making hard tech development faster, more efficient and —…

Rollup wants to be the hardware engineer’s workhorse

TechCrunch Disrupt 2024 is not just about groundbreaking innovations, insightful panels, and visionary speakers — it’s also about listening to YOU, the audience, and what you feel is top of…

Disrupt Audience Choice vote closes Friday

Google says the new SDK would help Google expand on its core mission of connecting the right audience to the right content at the right time.

Google is launching a new Android feature to drive users back into their installed apps

Jolla has taken the official wraps off the first version of its personal server-based AI assistant in the making. The reborn startup is building a privacy-focused AI device — aka…

Jolla debuts privacy-focused AI hardware

OpenAI is removing one of the voices used by ChatGPT after users found that it sounded similar to Scarlett Johansson, the company announced on Monday. The voice, called Sky, is…

OpenAI to remove ChatGPT’s Scarlett Johansson-like voice

The ChatGPT mobile app’s net revenue first jumped 22% on the day of the GPT-4o launch and continued to grow in the following days.

ChatGPT’s mobile app revenue saw its biggest spike yet following GPT-4o launch

Dating app maker Bumble has acquired Geneva, an online platform built around forming real-world groups and clubs. The company said that the deal is designed to help it expand its…

Bumble buys community building app Geneva to expand further into friendships

CyberArk — one of the army of larger security companies founded out of Israel — is acquiring Venafi, a specialist in machine identity, for $1.54 billion. 

CyberArk snaps up Venafi for $1.54B to ramp up in machine-to-machine security

Founder-market fit is one of the most crucial factors in a startup’s success, and operators (someone involved in the day-to-day operations of a startup) turned founders have an almost unfair advantage…

OpenseedVC, which backs operators in Africa and Europe starting their companies, reaches first close of $10M fund

A Singapore High Court has effectively approved Pine Labs’ request to shift its operations to India.

Pine Labs gets Singapore court approval to shift base to India

The AI Safety Institute, a U.K. body that aims to assess and address risks in AI platforms, has said it will open a second location in San Francisco. 

UK opens office in San Francisco to tackle AI risk

Companies are always looking for an edge, and searching for ways to encourage their employees to innovate. One way to do that is by running an internal hackathon around a…

Why companies are turning to internal hackathons

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

1 day ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine