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Carmakers Looking at May Restart as Coronavirus Lockdowns Ease

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Tesla, Inc. (TSLA - Free Report) reportedly is calling a few workers back to its vehicle-assembly plant in Freemont from this week. The company had earlier said that it plans to resume operations from May 4. Not only Tesla, other major carmakers too are finally readying to open their North America operations from May.

Carmakers across the United States had temporarily shuttered their plants in late March, following the coronavirus outbreak. Both production and sales of vehicles have been taking a beating since then. However, many carmakers had joined in to fight the pandemic by ramping up production of ventilators and face masks. Now, with many states starting to ease restrictions, carmakers are contemplating resuming operations.

Tesla Planning to Resume Operations

According to a Bloomberg report, Tesla has asked a few workers in the paint and stamping operations at its California facility to report to the factory on Apr 29. Tesla has also asked the staff to reply and let the company know if they intend to show up on the said date.

Tesla’s California assembly plant remains closed since Mar 24. The electric carmaker had earlier said that plans to restart production from May 4, a day after the Bay Area shelter-in-place order is scheduled to be lifted. The California facility builds Model Y, 3, X, and S models, representing each model in Tesla’s lineup. The carmaker produced its last cars before the shutdown on Mar 23. However, San Francisco Mayor London Breed said that the stay-at-home orders might get extended beyond May 3. Tesla carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Carmakers Looking at a May Restart

A number of carmakers, other than Tesla, with operations in North America are planning to reopen their plants in May. An already ailing auto industry has further been hit by the shutdown of plants owing to the coronavirus outbreak. The prolonged shutdown has led to a considerable decline in auto sales in the past month with losses likely to run through the second quarter.

Earlier this month, automakers Fiat Chrysler Automobiles NV and Honda Motor Co,. Ltd (HMC - Free Report) announced that they are expecting to restart production in the United States and Canada in May. Car companies had initially expected to resume manufacturing in April but decided not to when the pandemic took an ugly shape in the United States.

Further delay would mean more losses but the situation might finally start changing as many U.S. states are slowly easing restriction. A few days back, Fiat said that it expects to restart its manufacturing facilities in the United States and Canada beginning May 4.

Earlier this month, Ford Motor Company (F - Free Report) said that it believes sales of around 600,000 vehicles are likely to have been lost in March following the coronavirus outbreak. General Motors Company (GM - Free Report) too has shuttered all its plants in the United States. Although the companies haven’t given any specific reopening dates, both are looking at a May restart.

Toyota Motor Corporation (TM - Free Report) is also targeting a gradual ramp-up of production starting May 4. Volkswagen AG (VWAGY - Free Report) last week said that it is planning to resume operations in phases at its Chattanooga, TN plant from May 4 and gradually enhance production over the next few weeks as the restrictions are lifted.

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