Chinese authorities are battling to contain the coronavirus outbreak, and most recently, the Shanghai government has ordered all private companies in the city to close their doors until February 9.
The reasoning behind the shutdown is very clear: the numbers don’t look good. The confirmed death toll is at 132, and over 6,000 people are infected worldwide.
Tesla isn’t the only billion-dollar company that’s affected by the shutdown. Google's also temporarily shutting down its China offices, and Apple and Facebook restricted employee travel this week.
On a call with the Verge, 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.”
We just delivered our first customer cars from Gigafactory Shanghai, marking only one year from when the teams broke ground on the site. pic.twitter.com/UfUxEyRQv0— Tesla (@Tesla) January 7, 2020
Moreover, he also added that the company doesn’t "expect too big of a financial hit." This is due to the Shanghai-produced Model 3 representing a tiny fraction of the company’s quarterly profits.
The dreaded suspension has come a few weeks after Tesla celebrated the delivery of its first batch of Shanghai-assembled Model 3 cars to customers in China. The delivery, which happened on January 7, marked a milestone for the electric car maker. However, Tesla’s plans for hoping to use its Shanghai factory to gain a foothold in China seem to be on hold for the moment.
What a way to close out 2019, and this is only just the beginning.— Tesla (@Tesla) December 30, 2019
Congratulations to the Shanghai team! https://t.co/N6U8qlTPWp