Tesla told it cannot reopen its factory despite green light from California Governor

Alameda County has informed Tesla it did not meet criteria to reopen its plant

Tesla has been ordered by Alameda County to keep its plant in the US closed due to the coronavirus pandemic. EPA 

Tesla was told by the California county that’s home to its lone US auto-assembly plant that it cannot reopen the facility, hours after chief executive Elon Musk made plans to do so.

Alameda County said in an emailed statement that it informed Tesla it did not meet criteria to reopen.

Tesla aimed to restart the factory Friday afternoon, Mr Musk told staff in an email seen by Bloomberg. The chief executive cited California Governor Gavin Newsom’s announcement earlier that he would let manufacturers in parts of the state resume operations starting Friday.

What Mr Musk did not mention in his memo was that Mr Newsom also had said local authorities could remain more restrictive than the state. San Francisco Bay area counties including Alameda said they were leaving in place health orders that extend through the end of May.

Tesla representatives did not respond to requests for comment. Valerie Capers Workman, the car maker’s head of North American human resources, told employees in a separate email that Tesla’s Fremont plant would start operations with 30 per cent of normal headcount per shift. It is unclear whether that level of staffing would be enough to allow the company to produce cars again.

“Production restart may not be until June,” Dan Levy, a Credit Suisse analyst, cautioned in a note to clients. Tesla shares closed up more than 5 per cent on Friday and have surged 96 per cent this year.

Mr Musk has sharply criticised shutdown orders, calling them “fascist” and comparing them with forcible imprisonment. Tesla initially defied Alameda’s order in March and resisted pressure from the county and the city of Fremont, claiming it was an essential business. The county’s health officer disagreed and said the factory posed a risk to public health.

Another reasons it is unclear whether Tesla will be able to produce vehicles – even if Alameda allows the company to reopen in Fremont – is that its suppliers in other states are not able to operate yet.

In Michigan, Governor Gretchen Whitmer issued a separate announcement Thursday giving manufacturers the green light to reopen beginning May 11. That clears the way for parts suppliers to support General Motors, Ford Motor and Fiat Chrysler Automobiles' plans to restart their North American plants on May 18.

Mr Musk cheered Mr Newson’s announcement in a reply to one of the governor’s Twitter posts on Thursday. But Alameda County said in a statement that its current health order takes precedence over Mr Newsom’s guidance.

“We will continue to work with our community and business leaders to accomplish careful, measured progress that allows us to maintain our gains as we move forward to further reopening and better times ahead,” Alameda said in a joint statement issued by San Francisco Bay area counties and cities.

Tesla is not producing any vehicles worldwide after having suspended production at its only other car factory, located on the outskirts of Shanghai, this week. Several workers who were supposed to return to work on Wednesday after China’s five-day Labor Day break were told that their holiday would be extended and they will return as soon as May 9, according to sources.

In a press conference on Monday, Mr Newsom said the state is not telling local governments that feel it’s too soon to reopen to modify their orders.

“For example, the Bay Area, Northern California, they have guidelines where they are a little more strict than these guidelines,” he said. “If they choose not to come into compliance with the state guidelines, they have that right.”