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Why Tesla Stock Jumped on Friday

By Daniel Sparks - May 8, 2020 at 12:37PM

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Is the electric-car company restarting vehicle production today?

What happened

Shares of Tesla (TSLA 4.67%) jumped on Friday, rising about 5% as of 12:05 p.m. EDT.

Optimism for the electric-car maker's stock followed news that Tesla seems to be calling a large portion of its workforce back to work at its factory in California on Friday in an effort to restart production.

Tesla's Model S, X, 3, and Y

Image source: The Motley Fool.

So what

In an email to employees last night, CEO Elon Musk said that the company is moving to restart production on Friday afternoon, following an announcement from California Governor Gavin Newsom that said the state would allow retail, manufacturing, and logistics sectors to reopen with modification as of today. 

In another email from Tesla's head of North American human resources lead, the company said it planned to start operations at the factory with 30% of its normal workforce.

Now what

Despite the California governor's authorization for manufacturing to reopen, Newsom also said that local authorities were allowed to set forth their own restrictions beyond the state's -- and Alameda County, where the Fremont factory is located, has left instructions for businesses like Tesla's factory to remain shut down through the end of the month. Based on Tesla's emails to employees this week, however, it sounds like the company could be defying this order.

In his email, Musk did urge employees who are uncomfortable coming back to work not to feel required to do so.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

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