Shanghai to help Tesla resume production amid coronavirus spread

Coronavirus slows China-built Model 3 production

SHANGHAI - U.S. electric carmaker Tesla’s (TSLA.O) factory in China’s financial hub of Shanghai will resume production on Feb. 10 with assistance to help it cope with a spreading epidemic of coronavirus, a Shanghai government official said on Saturday.

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Many factories across China shut in late January for the Lunar New Year holiday that was originally due to end on Jan. 30 but which was extended in a bid to contain the spread of the new flu-like virus that has killed more than 700 people.

Tesla Inc CEO Elon Musk stands next to a Tesla China-made Model 3 vehicle during a delivery event at its Shanghai factory in China January 7, 2020. REUTERS/Aly Song - RC2XAE9WK1MY

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Tesla warned on Jan. 30 that it would see a 1-1.5 week delay in the ramp-up of Shanghai-built Model 3 cars as a result of the epidemic, which has severely disrupted communications and supply chains across China.

Tesla Vice President Tao Lin said this week that production would restart on Feb. 10 and that car deliveries from the plant would be temporarily delayed.

“In view of the practical difficulties key manufacturing firms including Tesla have faced in resuming production, we will coordinate to make all efforts to help companies resume production as soon as possible,” Shanghai municipal government spokesman Xu Wei said.

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In this Nov. 24, 2019, photo, a saleswoman talks about a Tesla Model 3 car at a Tesla showroom in Hangzhou in eastern China's Zhejiang Province. (Chinatopix via AP)

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The $2 billion Shanghai factory is Tesla’s first outside the United States and was built with support from local authorities. It started production in October and began deliveries last month.

The Shanghai government also said on Saturday it would ask banks to extend loans with preferential rates to small companies and exempt firms in hard-hit sectors like hospitality from value-added tax, among other measures to prop up businesses during the epidemic.

Such assistance would also apply to foreign companies.

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