China, with regard to the current situation of the Corona epidemic, has asked Tesla to shut down its factory in Shanghai temporarily. The electric car company might suffer a slight loss in its revenue in the first quarter of 2020 as a result of this shut down because it will delay the production of its Model 3 in Shanghai.
This factory, called the Tesla Giga Shanghai produces battery cells along with Tesla Model 3 and Model Years and they have a production rate target of 250,000 electric cars per year.
The Chinese government has asked the factories and offices to remain closed until the 9th of February 2020 and Tesla is one of the major companies that are impacted by the issue.
Tesla had started production of Model 3 in China with high hopes of growing its business by utilizing the country’s growing market for electric vehicles. They had delivered their first Shanghai produced model 3 vehicle at the end of 2019. “At this point, we’re expecting a one to a one-and-a-half week delay in the ramp of Shanghai built Model 3s due to a government required factory shutdown”, said the Tesla Finance chief Zack Kirkhorn.
Tesla had reported a revenue of $24.6 billion in the year 2019 and $7.4 billion in the 4th quarter of the same year. The Corona Virus outbreak was quite unpredicted and it might affect their business plans. The epidemic and resulting business shutdowns have affected many other major tech giants like Google, Facebook, and Apple who had to close down their outlets or main offices across the Chinese mainland.
By the end of 2019, Tesla had made a profit of $105 million and thus finished the year with back to back profitable quarters.