China has reportedly ordered Tesla to temporarily shut down its Shanghai facility amid the outbreak of novel coronavirus. The shutdown is likely to delay the company’s Model 3 production and would also ‘slightly’ impact its profitability in Q1 2020.
Tesla's finance chief Zach Kirkhorn told The Verge that the Chinese government had asked several companies to remain shut till February 9. The government’s shutdown order will further lead to production delays of Model 3. “At this point we are expecting a one to one-and-a-half week delay in the ramp of Shanghai-built Model 3s due to a government required factory shutdown,” Kirkhorn told the website.
Tesla began delivering its first batch of electric cars manufactured in its Shanghai facility at the end of 2019. The American electric-car maker began producing its Model 3, hoping to make a strong presence in China.
However, now that the government has ordered a shut-down, Tesla expects a dip in its revenue and deliveries. The company doesn’t expect too big of a financial hit, as the Shanghai-produced Model 3 only represents a tiny fraction of the company’s quarterly profits, Kirkhorn said.Google, too, has temporarily shut down due to the coronavirus outbreak.