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Trump Says California Should Let Tesla Open Its Factory "NOW"

By Daniel Sparks – May 12, 2020 at 3:13PM

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The president is siding with Elon Musk in this heated debate.

A debate between Tesla (TSLA -3.46%) CEO Elon Musk and California's Alameda County has been getting more heated over the last few days after the executive insisted on opening the company's factory there even though the county officials hadn't authorized the move. The debate intensified further when, on Tuesday morning, President Donald Trump sided with Musk on Twitter.

The reopening of its factory in California against Alameda County's orders comes as many businesses (including other U.S. auto manufacturers) around the country are restarting, albeit under strict social-distancing guidelines and restricted operations.

Given most of its vehicles are produced in California, it's not surprising to see Tesla attempting to get production moving.

Vehicle production in Tesla's factory

Image source: The Motley Fool.

Resuming operations

"California should let Tesla & [Elon Musk] open the plant, NOW," President Donald Trump tweeted on Tuesday morning. "It can be done Fast & Safely!" 

This statement follows Tesla's decision over the weekend to sue Alameda County and begin the process of resuming operations. Key to Tesla's decision to reopen its factory was California Governor Gavin Newsom's guidance for manufacturing to be among the industries that should be allowed to reopen with modifications. But Newsom has also stated that local authorities could enforce their own restrictions.

"Given the Governor's recent guidance, which is supported by science and credible health data, the state and federal government's classification of vehicle manufacturing as national critical infrastructure, and our robust safety plan," the company wrote in a blog post on Saturday, "Tesla has started the process of resuming operations."

The EV maker added that it is getting back to work with the safety of its employees in mind.

"Our restart plan is the result of months of careful planning and preparation," Tesla explained. "It was modeled after the comprehensive return to work plan we established at our Shanghai Gigafactory, which has seen smooth and healthy operations for the last three months."

What's next?

In a statement on Monday, Alameda County said that it was moving closer to an "agreed upon safety plan for reopening" Tesla's factory but it also said that the company's decision to reopen before the county approved the move will be addressed in the same manner the county is addressing any businesses that violated its local public health order. 

While Trump's statement on Twitter wasn't backed by any action, it could play a role in convincing Alameda County to be more lenient with Tesla. Musk later tweeted "Thank you!" in response to the president's post.

Meanwhile, the beginning of vehicle production in California could be a significant boon for Tesla's business. The automaker boasts annual production capacity of nearly 500,000 vehicles at the factory. This compares to installed production capacity for 200,000 vehicles annually at the company's factory in Shanghai. Of course, it will take Tesla time to get back to these production levels.

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

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