The threat of the coronavirus is causing global automakers to suspend production. The short-term impact is to delay the rollout of the next wave of EVs, such as VW’s ID.3. Volkswagen today said that it’s suspending production “in the near future” at factories across Europe, including in Zwickau, Germany, where the ID.3 is produced.
Nearly every other global automaker, with the exception of GM and Tesla, is temporarily suspending production.
Volkswagen’s works council argued that workers couldn’t maintain a safe distance from each other to prevent contagion. Despite imminent closures, VW CEO Herbert Diess said the company would stay on track with its rollout of the ID.3.
Diess said, “We are standing by our electrification plan.” The German automaker plans to deliver “30,000 ID.3 electric cars almost at once” when they start deliveries this summer.
On Monday, Volkswagen said it had also closed its Chattanooga plant at least for one day. In November, Volkswagen broke ground on a new plant in Chattanooga to produce the all-electric ID.4 (ID Crozz) starting in 2022.
The company is putting the current Chattanooga plant through “deep cleaning,” while it assesses a plan going forward. The factory was closed Monday and provided paid time off so workers can assess child care needs and make arrangements.
Audi, VW’s luxury brand, said separately it would halt output at its plants in Belgium, where the e-tron is produced. And Daimler decided today to interrupt the majority of its production “for an initial two weeks.” These steps will further crimp production of the e-tron and EQC all-electric SUVs, which already faced battery-supply constraints.
French carmaker PSA said it was closing its European factories until March 27. Renault said it would suspend industrial activities in France, closing 12 sites and sending home 18,000 employees until further notice.
Meanwhile, Tesla is defying a “shelter in place” order issued in the Bay Area, where its Fremont plant makes most of the company’s cars. We contacted Tesla several times about the status of its Fremont factory, but the automaker didn’t respond.
Elon Musk sent mixed messages to employees. He said that panic about the virus was worse than the virus itself. But he sent an email to employees asking those who feel “the slightest bit ill or even uncomfortable” to not “feel obligated” to come to work. Musk will keep working at Tesla sites. Last month, Tesla had to shut down its Gigafactory Shanghai for several days.
General Motors this week began work to retool the Detroit-Hamtramck plant to make EVs. The relatively small workforce of 70 skilled workers was taking precautions. And all GM factory workers are being screened for signs of illness. A GM spokesperson told Electrek today that the Orion Assembly plant, where the Chevy Bolt is made, is “producing without issue or interruption.”
While Ford is not currently producing electric vehicles, the company closed a plant in Spain after three workers tested positive for the coronavirus. Ford said vehicle and engine production at its manufacturing sites in continental Europe will be down “for a number of weeks,” effective Thursday. A Fiat-Chrysler worker at a Kokomo, Indiana, plant tested positive for the coronavirus last week, and those who may have come in contact with him were told to stay home.
Nissan suspends production at its Sunderland plant in the UK, where the Nissan Leaf is produced. (It’s not clear if production of the Leaf in Oppama, Japan, was interrupted.) In a company statement, Nissan said, “Further measures are currently under study as we assess supply chain disruption and the sudden drop in market demand caused by the COVID-19 emergency.”
In early February, Hyundai and Kia Motors became the first global automaker to suspend production outside China due to the coronavirus outbreak disrupting parts supply from China. The company said it had gradually increased production in South Korea from Feb. 11.
In mid-February, China’s battery cell-production slowed down due to COVID-19. Wood Mackenzie, a research firm, forecast that 2020 cell output would be reduced by 10%. By the end of February, media was reporting that production had started to ramp back up.
“Major producers have reached rates of 60% to 70%, and the ramp-up of producers that reopened the week of February 24 is expected to continue through early March,” reported Shanghai Metals Market, a research company.
The Impact on EV Sales
Morgan Stanley expects the coronavirus outbreak to reduce all US vehicle sales down 9 percent this year. Colin McKerracher, a transportation analyst with BloombergNEF, said he expects EV sales to grow in Europe this year, despite a contraction in the overall vehicle market.
“People aren’t shopping for cars right now,” said Ram Chandrasekaran, a transportation consultant at Wood Mackenzie. He questioned if first-time EV buyers would be willing to make the switch to electric under the current economic conditions.
To stimulate sales of all vehicles, not just EVs, GM Financial is offering 0% financing for seven years, as well as four months deferred payments for buyers with A+ credit. Ford on Monday announced a program giving customers who buy new vehicles the option to delay their first payment for 90 days.
FTC: We use income earning auto affiliate links. More.
Subscribe to Electrek on YouTube for exclusive videos and subscribe to the podcast.