Coronavirus: Tesla pauses EV production at two key sites as BYD pivots manufacturing

Tesla will temporarily suspend production at two of its US factories from the end of today's (23 March) working hours - making it the latest electric vehicle (EV) manufacturer to scale back plant operations in light of the Covid 19 pandemic.

The suspensions are until further notice, with all affected staff receiving full pay. Image: Tesla

The suspensions are until further notice, with all affected staff receiving full pay. Image: Tesla

The firm’s factory in Fremont, California, will shut down completely, while its New York factory is halting production of all vehicles and parts except “those necessary for service, infrastructure and critical supply chains”.

Tesla has not said when either location will return to a full operation but has reassured staff and investors that the suspensions are temporary.

The decision was taken at this point, Tesla said in a statement, due to the “challenges” which the pandemic has caused to “employees, their families and suppliers”. On the latter, Tesla notably has extensive supply chains in China and Germany. Moreover, Panasonic is this week scaling down operations at the Nevada-based battery Gigafactory it operates in joint venture with Tesla, before initiating a 14-day shutdown.

Tesla is, however, anticipating fewer issues with sales to consumers than many other carmakers. This is because it offers “touchless deliveries”, whereby customers can unlock their new vehicles using an app and drop completed paperwork into on-site boxes, at many sales locations.

Sector-wide response

The news from Tesla comes shortly after BYD Auto – China’s largest automaker and EV producer – revealed that it is now operating what it claims is the world’s largest face mask manufacturing plant.

BYD began pivoting its production plans around a month ago, after scaling back EV production. It is now hoping to produce five million face masks and 300,000 bottles of hand sanitizer gel per day, by the end of the week, using the equipment it already has. These products will be supplied to healthcare providers across China.

As the pandemic continues to intensify in Europe, many of the continent’s biggest carmakers have scaled back or suspended manufacturing lines – including those used for EV production.

Nissan’s Sunderland factory, which produces the fully electric Leaf, closed last week, as did production facilities operated by Vauxhall, Volkswagen, Toyota and Ford.

As such locations begin to re-open in the coming weeks and months, the expectation is that they will pivot all or some of their production lines to make ventilators.

BloombergNEF last week altered its forecasts for the global EV battery market, in light of Covid 19. It is now anticipating a 4% year-on-year drop in demand.

Sarah George



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