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Auto-disruptor Tesla also challenges COVID-19 norms

Henry Payne
The Detroit News
Tesla's Model Y crossover.

Silicon Valley electric-vehicle maker Tesla Inc. has made its mark as a disruptive force in the U.S. auto industry, and the coronavirus outbreak has been no different.

While Detroit automakers have sounded the alarm in the face of the COVID-19 threat —reducing employee travel and shuttering plants — Tesla CEO Elon Musk has resisted.

Since a tweet saying “the coronavirus panic is dumb” on March 6, Musk has maintained a contrarian narrative via social media and emails including giving advice on drugs to fight infection. In emails to employees he has discounted the threat of COVID-19 even as he has encouraged those who feel ill to stay at home.

But with its first, mass-produced Model Y SUV in production, Tesla has been swept up in the coronavirus panic as California's Alameda County has issued a “shelter in place” edict forcing all non-essential businesses to shut down — including Tesla.

After attempting to maintain full operation, Tesla agreed Wednesday afternoon to reduce its workforce to 2,500 from 10,000 to maintain what the county sheriff's office called "minimum necessary activities to maintain the value of the business’s inventory, ensure security, process payroll and employee benefits, or for related functions."

It remains to be seen whether Tesla will interpret the directive as including manufacturing.

The sheriff's 2,500-employee crackdown came after Tesla defied the county in an email to employees early Wednesday, according to The Los Angeles Times, stating “we have had conflicting guidance from different levels of government. Until then. . . there are no changes in your normal assignment and you should continue to report to work if you are in . . . production, service, deliveries, testing and supporting groups.”

Tesla began customer deliveries of its Model Y over the weekend. Unlike other auto makers, start-up Tesla does not deliver through dealer bodies — but directly to customers.

Analysts say that production of the Model Y is critical to maintaining the company's cash flow. Tesla has struggled to become profitable since it produced its first car, the Model S sedan, in 2011. 

Now America's best-selling American luxury automaker, Tesla has pioneered the sale of performance electric cars. But it has also broken the mold on everything from autonomous driving to charging infrastructure to vehicle maintenance. Key to its industry disruption has been its colorful CEO who has had a Trump-like knack to rattle social media.

As he has challenged auto norms, Musk reportedly challenged accepted wisdom on the coronavirus outbreak in an email to employees March 13, writing that the evidence so far "suggests that this is not within the top 100 health risks in the United States.” As an example, he wrote “the risk of death from C19 is vastly less than the risk of death from driving your car home.”

The memo came the same day as other U.S. automakers canceled product introductions for fear of spreading the virus. Musk received pushback from some medical experts, but he followed up with a tweet on Monday cautioning that “danger of panic still far exceeds danger of corona(virus). If we over-allocate medical resources to corona, it will come at expense of treating other illnesses.”

On Tuesday, he tweeted links to medical papers recommending the drugs chloroquine and hydroxychloroquine to treat the effects of coronavirus.

Then, as the government threatened to shut down his factory, he engaged by email again with his non-union employees according the the Los Angeles Times, writing: “My frank opinion is that the harm from the coronavirus panic far exceeds that of the virus itself” and COVID-19 cases “will not exceed 0.1% of the population.”

On Wednesday, after negotiations with UAW leaders and positive tests for coronavirus in workers, Ford, GM and FCA shut down shut down facilities until March 30.

Tesla has received favorable coronavirus treatment from governments before with China providing it masks, virus screening — and fast-tracking the plant to re-open after business closed earlier this year.

“A lot of rumors are flying around, but, to the best of our knowledge, no one at Tesla (over 56,000 people) has tested positive for COVID-19,” wrote Musk to Tesla workers. Alameda County, with a population of over 1.5 million, has had just 31 people test positive for COVID-19.

Henry Payne is auto critic for The Detroit News. Find him at hpayne@detroitnews.com or Twitter @HenryEPayne.