The Chinese government has ordered the shutdown of Tesla’s new factory in Shanghai over coronavirus fears, which will delay the company’s production of the Model 3 there, executives announced in a call with investors. The ramp of the Model 3 production will be delayed by a week and a half and the shutdown may “slightly” impact the company’s profitability in the first quarter of 2020, Tesla finance chief Zach Kirkhorn said.
“At this point, we’re expecting a one to a one-and-a-half week delay in the ramp of Shanghai built Model 3s due to a government required factory shutdown,” he said on the call. Tesla is one of several companies affected by the Chinese government’s order, which requires facilities to remain shut down until February 9th.
Tesla began delivering the first cars produced at its Shanghai factory at the end of 2019. The deliveries marked an important milestone for Tesla, which hopes to use its Shanghai factory to gain a foothold in China, the world’s largest market for electric vehicles. Having a local factory speeds up deliveries and may insulate the company from the ongoing trade war between the US and China. The Shanghai Gigafactory is the first wholly foreign-owned car plant in China.
