Tesla cancels plans to bring workers back to US car plant this week

Key Points
  • Tesla canceled its plans to bring workers back to production lines at its Fremont, California car plant this week according to internal correspondence shared with CNBC.
  • Local authorities in Alameda County also extended health orders, on Monday, which limit Elon Musk's electric vehicle company to "minimum basic operations" at its main, US car plant. 
  • The Fremont factory makes Tesla vehicles for North America and Europe. Tesla's plant in China is currently operating six days a week.

In this article

Workers assemble cars on the line at Tesla's factory in Fremont.
David Butow | Corbis News | Getty Images

On Monday, Tesla reversed course and canceled requests to bring workers back to production lines in Fremont, California, this week.

According to internal correspondence shared with CNBC, Tesla asked dozens of furloughed workers last Friday, and over the weekend, to come back on Wednesday, Apr. 29 to resume production in Fremont.

In new messages sent Monday and distributed on some internal message boards, a human resources employee wrote:

"Per the direction of the executive leadership team, we will not be returning to work Wednesday, April 29. Please disregard all communication and directives on returning to work this week." 

Tesla shares dropped more than 1% on the news in after-hours trading, after rising more than 10% during the day. 

Bloomberg previously reported that Tesla might have to walk back its plan to let some workers back in this week. 

Health orders in Alameda County, where the Fremont factory is based, require Tesla to operate at minimum basic levels only. Tesla previously said it would resume production when those orders expired, and the company anticipated that date would be May 4th.

However, the county plans to the health orders through the end of May in a quest to curb the spread of the novel coronavirus, according to a release issued on Monday.

Tesla did not immediately respond to requests for comment.

Tesla's Fremont factory makes its legacy Model S and X vehicles, and newer Model 3 and Y vehicles for delivery to customers in North America and Europe. Tesla also operates a car plant in China six days a week currently. It had previously closed the Shanghai plant for about two weeks amid Covid-19 health orders there but resumed quickly with help from that local government. 

Tesla is expected to report its first-quarter results on Wednesday. 

Tesla Q1 deliveries beat, 88.4K vs. 79K estimated
Tesla Q1 deliveries beat, 88.4K vs. 79K estimated