California gives Tesla ‘essential workforce’ exemption from new Covid-19 health orders

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02 September 2020, Berlin: Technology entrepreneur Elon Musk arrives with a face mask for the executive board meeting of the CDU in Westhafen. Photo: Fabian Sommer/dpa (Photo by Fabian Sommer/picture alliance via Getty Images)

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The California Department of Public Health has deemed Tesla employees “essential workers” in the state, and exempted the company from new Covid-19 health orders announced by Gov. Gavin Newsom this week. The designation means Tesla’s U.S. car plant in Fremont, California, can continue operating in accordance with its prior Covid-19 safety plan.

The new Limited Stay at Home Order impacts a majority of California’s residents beginning Saturday. It imposes a curfew, asking nonessential work and gatherings to stop between 10 p.m. and 5 a.m.

In response to a CNBC inquiry about how the curfew would impact Tesla’s employees, the CPHD wrote:

“The Limited Stay at Home Order does not apply to these employees as they are deemed essential workers – manufacturing is listed as an essential workforce. You can find more here. The Critical Manufacturing Sector identifies several industries to serve as the core of the sector including Transportation Equipment Manufacturing Products. While operating, this sector must follow industry guidance for manufacturing.”

Local authorities in Alameda County, where Fremont is located, could place additional restrictions on top of state guidance in the future, but they have not done so yet.

A spokesperson for the Alameda County Public Health Department declined to answer any questions about Tesla, but sent a press statement to CNBC from November 16.

The statement notes, among other things, that Alameda County is facing a surge of Covid-19 cases and hospitalizations. The county is now in California’s “purple tier,” the most restrictive level in the state’s “reopening framework.” Therefore, as of midnight November 18, “all activities and sectors must conform to the state’s requirements for counties in the Purple Tier.”

The Alameda County Public Health department statement also says: “As the situation develops, we may need to further restrict activities to slow the spread of the virus.”

Meanwhile, the California Department of Public Health emphasized that it issued guidance back in July, for manufacturing industries “to support a safer lower risk environment for workers.” That guidance has not been updated with any new requirements or precautions for workers in a factory environment.

When the Covid-19 virus emerged in California earlier this year, Alameda County’s health authority required Tesla to wind down to minimum basic operations in Fremont, while hammering out an acceptable workplace safety plan that would protect factory workers from the novel coronavirus.

Tesla and CEO Elon Musk defied the health orders, and seemingly faced no repercussions.

Nonetheless, Musk has since insulted California’s business environment.

For example, he tweeted on October 30, 2020: “I’ve spent more than half my life in California & love the state. But, frankly, I think CA has the winning-for-too-long problem. Like a sports team with many championships, it is increasingly difficult to avoid complacency & a sense of entitlement.”

On November 14, Musk disclosed that he “likely” had a “moderate” case of Covid-19, and was experiencing symptoms.

The news that Tesla’s factory can continue operating under the safety plans previously agreed upon by the county and state health authorities will come as a relief to some Tesla shareholders.

CFO Zachary Kirkhorn said during a third-quarter earnings call that Tesla is still aiming for deliveries of 500,000 electric vehicles in 2020. Even with a new, Shanghai factory online this year, that number still proves a challenge to Musk’s car company. In 2019, Tesla delivered approximately 367,500 vehicles.

Tesla did not immediately respond to a request for comment.

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