Economy

Workers Return to Giga Shanghai After Shutdown Due to Coronavirus

Workers Return to Giga Shanghai After Shutdown Due to Coronavirus”

Shares of the Elon Musk-led automaker gained as much as 9% in early trading Monday, continuing to climb following a volatile week for the stock.

Tesla's Shanghai Gigafactory resumed operations on Monday after weeks of a government-mandated temporary shutdown due to the coronavirus outbreak in China, Japanese outlet The Asahi Shimbun reported today. The company will also receive assistance from the Chinese government to resume production, Markets Insider reported.

Speculations have it that Tesla had warned the authorities that the company would witness a week and half of delay in upgradation of Shanghai built Model 3 cars due to the virus outbreak, which has now severely disturbed communications and supply chains across the country.

Meanwhile, Xu Wei, the Shanghai municipal government spokesman reportedly quoted that government is set to render all kinds of support to key manufacturing firms including Tesla in resuming the businesses amidst practical difficulties faced.

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A Tesla executive in China said last week that deliveries of Tesla's Model 3 sedan scheduled for early this month would be delayed. It's good news for the Chinese people and Tesla, but it's not expected that the factory will return to full speed immediately. Last week, the stock posted double-digit gains on Monday and Tuesday and reached as high as US$968.99 per share before falling 17% on Wednesday, the report said.

It fell on fears that the stock's rapid climb was a bubble, or that it was fuelled by a short squeeze, which is when short-sellers stop betting against a stock as the price gains push losses to the limit.

Tesla's Shanghai plant to recommence its production with state government support amid the pandemic spread.

Tesla reported $1.3 billion of expenditures for all of previous year, well below its initial plan for as much as $2.5 billion.



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