Panasonic is temporarily suspending battery production at Tesla’s Nevada plant due to the coronavirus, according to the Reno Gazette Journal. The company will begin ramping down operations this week with increased cleaning, disinfecting and social distancing until the closure.
- Panasonic currently plans to close for only 14 days.
- Tesla, for now, is maintaining operations in Nevada even as its Fremont, California, factory closes.
- How these production breaks will impact vehicle deliveries is unclear.
The announcement sends home roughly 3,500 workers employed at the Tesla Gigafactory in Sparks, Nevada, and the production halt is due to last for 14 days. During that time, employees will receive their full pay and benefits. Panasonic’s decision to send its employees home does not apply to Tesla employees at the same location.
Tesla plans to keep its Nevada factory and its Supercharger networking in operation. (Photo: Getty Images)
How this impacts Tesla is uncertain
Operations at the factory are mostly divided between the two companies. Panasonic focuses on production of batteries. Tesla focuses on production of powertrains for the Model 3 and battery assembly. How the closure of the Panasonic side of the business will impact Tesla is unclear.
As of yet, Tesla has announced no plans to close its factory in Nevada, but it is closing down production elsewhere. Its factory in Fremont, California, which was originally remaining fully open, closed at the end of the day Monday except for basic operations. Tesla is also temporarily closing its factory in New York.
In announcing those closures, Tesla clearly stated that other facilities, including Nevada, were continuing to operate. It also planned to keep is Supercharging network up and ready for customers.
WHY THIS MATTERS
While the Nevada plant remains open for now, it’s unclear how long that will continue as states initiate increasingly stringent shelter-in-place orders. Whether or not Tesla is an essential business was at the crux of a disagreement with authorities in Alameda County, California, after they issued a shelter-in-place order that eventually led to that plant’s closure.
These orders are open to interpretation and shutdowns don’t always happen quickly. Even if the factory in Nevada remains open, the closure of the Panasonic portion of the operation could negatively impact Tesla’s production schedule, especially if it goes longer than planned.