Tesla has temporarily closed all of its stores in mainland China, according to an online post posted by a Tesla salesman on Sunday, February 2. As of Thursday, Tesla’s China liaison office had not responded to media requests for comment.
The move comes as many parts of China have been closed to control the spread of the new coronavirus. Apple has closed its mainland stores over the weekend, citing public health concerns. Many other foreign brands have also temporarily suspended or restricted their operations in China.
According to a media translation of the original post ,sic Chinese, the Tesla employee wrote on WeChat: “From today, Tesla stores across China will be closed. But I’ll answer questions online 24 hours a day. Online ordering is still welcome. We advise you all to stay at home and take good care of your health. “
It is unclear whether the closures will also apply to Hong Kong.
Tesla’s shares fell more than 17 percent after Tao Lin, vice president of China, announced on Twitter on Wednesday that cars originally scheduled for delivery to customers in China in early February would be delayed because of the spread of the coronavirus.
To contain the virus, Shanghai has ordered local businesses not to resume work until February 10, meaning Tesla’s superfactory there will also be temporarily closed.
According to Tesla’s website, Tesla has 24 stores in mainland China. The carmaker does not sell by country, but Tesla opened a new superfactory in Shanghai last year because demand was strong enough.
The new plant only started delivering model 3s to Chinese customers in early January. The debut of the “Made in China” Model 3s comes at a time when China’s car market is cooling, even for so-called “new energy vehicles”.
Established carmakers such as Daimler, which owns Mercedes EQC SUVs, and Chinese start-ups Xiaopeng And Wayam are also vying with Tesla for market share in China’s electric cars. But Tesla’s brand and self-driving technology are thought to give Elon Musk’s company a bigger advantage.
The store closure is just another indicator of how the virus will affect Tesla’s operations this year.
When Tesla reported better-than-expected fourth-quarter results on January 29, the latest developments in its electric car manufacturing business in China helped boost Tesla’s share price.
By Wednesday, news broke that the impact of the virus on major automakers, including Hyundai and Tesla, would be more severe than initially expected, and some analysts had begun to downgrade Tesla’s rating from buy to hold or sell.
“We believe that the situation in China is critical in terms of Tesla’s earnings under GAAP in the first and second quarters of this year,” Garrett Nelson of CFRA Research said in a downgrade of Tesla’s rating on Wednesday. If it makes a profit in both quarters, it will clear the last hurdle for the stock to be included in the Standard and Poor’s 500-stock index (four consecutive quarters of profit). “