Tesla Temporarily Has Closed Shanghai Factory Over Coronavirus Concerns

Tesla has already shut down their Shanghai factory due to the order by the Chinese government to stem the spread of the coronavirus in the area. The finance chief named Zach Kirkhorn, during earnings on Wednesday, said that the closure would delay the production of Model 3 and consequently would put the profits slightly downward in this first quarter of 2020.

Before the call, on Wednesday, Tesla reported $105 million in their total income, comparing the income from the previous year in this period which was $140 million. They acquired $386 million in the 4th quarter when adjusted for the one-time items. Also, Tesla produced a revenue of $7.38 billion in the 4th quarter.

Kirkhom said that the production of Model 3 would be postponed by a week as the novel coronavirus firstly cropped in the Wuhan in December 2019, and since then thousands of people have been affected with this virus. It causes the government to take necessary measures like shutting down the factories and transit across the country which also include Foxconn. According to the NYT report, the Ford and Toyota will also remain idle for an extra week.

Tim Cook, the Apple CEO told to the investors that the Chinese suppliers were scheduled to stay closed till 10th February. At the same time, Starbucks said that they had shuttered over 2000 of the locations across China.

Kirkhorn said that they were in earlier stages of understanding, and they might temporarily be impacted by coronavirus, and at that point, they were expecting a one to one-and-a-half-week delay in Shanghai to build Model 3 because of the government required factory shutdown. That slightly might impact the profitability for the quarter.

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Shahina Khatun

Shahina is a Web Developer, Content Writer, SEO Expert and Social Media Marketer.

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