Alameda County ordered Tesla on Friday not to reopen its Fremont automobile assembly plant.
Tesla chief executive Elon Musk had told staff that he planned to restart the Fremont factory Friday afternoon, pointing to guidance by Gov. Gavin Newsom easing restrictions on manufacturing, according to an email from Musk seen by reporters at Bloomberg.
Tesla "must not reopen," the county said in a statement early Friday afternoon. "Restoring all daily activities too soon risks a rapid spike in cases and would jeopardize the relative stability we've seen in our health and hospital system."
Although Newsom has relaxed certain statewide restrictions on manufacturing, counties are allowed to set stricter measures. Alameda County said it informed Tesla that it did not meet criteria established on May 4 for a gradual loosening of business closure rules, though the Friday statement did not specify which criteria were not met.
Six Bay Area counties _ including Alameda, where the Fremont plant is located _ barred non-essential manufacturing in a wide-ranging March 16 order. That order was modified slightly and extended on May 4 to run at least until May 31, but the counties' ban on non-essential manufacturing was left in place.
Musk defied the original March 16 order until Fremont Police pressed his company to close the plant. The company had argued that making electric vehicles was essential to national security, and kept the plant open several days before closing down on March 23.
Tesla is eager to reopen the factory, which employs 10,000, most of whom are on furlough. Although it reported a net profit in this year's first quarter, analysts expect dismal results for the current quarter. The entire automotive industry is in a bad way, with many showrooms closed and inventory piling up.
Lack of profit hasn't yet proved a problem at Tesla. While the company has never earned an annual profit, its stock remains a high flyer, trading more than $800 for a market value around $150 billion, far higher than other automakers.
But cash is an issue.
Although Tesla reported $8 billion in cash on hand at the end of March, it's unclear how much Tesla has now. When asked on an April 29 conference call with analysts about the current cash balance, its chief financial officer declined to answer.
The company opened a new plant in Shanghai, China, in December, which should provide some relief. That plant has been churning out cars but recently shut down for several days. Media in China reported a lack of essential car parts. Tesla did not respond to emails or phone calls seeking comment.
Cash produced through Shanghai production and sales in China might be insufficient to meet any cash crunch. That's because Tesla has borrowed more than $1 billion from Chinese banks and its agreements with Chinese officials bar it from shipping cash to the U.S. until the debts are paid.
