Shanghai government to help Tesla resume production amid epidemic

US-based electric carmaker Tesla’s factory in China’s financial hub of Shanghai will resume production on February 10 with assistance from the city’s government to help it cope with a spreading epidemic of coronavirus, a local official said on Saturday.

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

Tesla warned on January 30 that it would see a 1-1.5 week delay in the ramp-up of production on its 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 February 10.

“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.

The $2bn Shanghai factory is Tesla’s first outside the US 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, it added.