Tesla: New Coronavirus outbreak could have significant adverse impact on business

Tesla said on Thursday that the presence of COVID-19 (the new coronavirus) in China and around the world could have a material impact on its business. For the first time in its history, the company mentioned the risk factor of a “health epidemic” in the risk factors section of the company’s 2019 10-K filing.

Tesla: New Coronavirus outbreak could have significant adverse impact on business

“Starting in late 2019, media coverage of a public health outbreak originating in China has led the government to shut down some travel and business activities on a precautionary basis,” Tesla wrote in the document. As a result, the Shanghai-based superplant was briefly shut down for some time before it went back into operation. It is not clear whether and to what extent supply chains around the world, particularly auto parts, will be affected if the outbreak continues for some time. We may experience costs or delays related to such incidents that we have no control over, which may have a material adverse impact on our business, operating performance and financial position. “

In an earlier earnings call, Tesla CEO Elon Musk said the company had no current plans for financing and said Tesla’s main priority was to reduce the cost of battery production.

However, two weeks after the outbreak, Tesla seems to have changed its mind. On February 13th Tesla announced that it planned to raise $2 billion through the issuance of common stock. Board member Larry Ellison will buy up to $1m worth of stock, while Musk will buy up to $10m.