You must have heard about the deadly coronavirus that has been spreading like fire in China and other parts of the world too. We know that the epicentre of this virus is from China’s Hubei province whereas its capital Wuhan has been the most affected. However, we know that people from Wuhan have travelled to other parts of China and the virus is now spread in most parts of the country. You might also be aware that the US’ Tesla went to China and even built their own Gigafactory.
Also, the electric car maker announced that it has built the first Tesla Model 3 in its Chinese factory with production starting soon. However, the coronavirus outbreak came at a very wrong time for Tesla as their production has now been delayed due to it. This is also because Tesla has closed its Shanghai gigafactory as the Chinese government has told everyone to remain indoors for as much as possible.
This was revealed by Tesla at an earnings call when they revealed that “At this point, we’re expecting a 1 to 1½ week delay in the ramp (up) of Shanghai-built Model 3 due to a government-required factory shutdown,”. Now, we know that the factory shutdown is required by the government but it also makes sense for companies to shut down factories on their own even if not required for precautionary measures.
Also, during the earnings call, Tesla said that they expect limited profits because their China-made cars are still at a very early stage. Having said that, it is seen that Tesla’s earnings were even better than Wall Street’s forecasts which meant that its stocks went up by 11% in after-hours trading. Tesla has also said that they will make an “original car” for the Chinese markets which might be totally new from Tesla’s US car lineup.