Even the most innovative companies in America are getting mowed down in some form or fashion as the recession starts to unfold. Tesla Inc. (NASDAQ: TSLA) may have seen its shares rally 18% on Thursday, but that’s after seeing its shares peak at almost $1,000 earlier in 2020 only to close down at $361.22 just on Wednesday. Maybe Tesla’s shares were way too bubbly up at the peak of the mania and that capital raise now looks like a good move on the part of management. Tesla’s newest shareholders have felt the burn in the latest market turmoil. Now Tesla has issued an operational update around COVID-19 signaling that much of its U.S. electric vehicle production is effectively shutting down for the time being.

A statement by the company indicated that it has been meeting with local, state and federal officials in the past few days. The company also claims to have been following all legal directions and safety guidelines concerning its operations and has honored the federal government’s direction to continue operating. Still, the company’s statement outlined that continued operations in certain locations have posed challenges for Tesla’s employees and their families as well as for its suppliers.

Tesla is temporarily suspending production at its Fremont factory starting at the end of day on March 23. That is said to be enough time to allow an orderly shutdown rather than simply stopping all production and letting things sit where they are. The statement also indicated that basic operations will continue in order to support vehicle and energy service operations and charging infrastructure.

Tesla’s factory in New York will also temporarily suspend production, except for the parts and supplies needed for service, infrastructure and for critical supply chains.

While New York and the Fremont factories are halting productions, Tesla’s operations at other facilities will continue. Those continual locations will include Nevada and the company’s service and Supercharging network.

Tesla did address how customers can still take delivery of their new cars. The statement said:

In many locations, we are in the process of implementing “touchless deliveries” so customers can continue to take delivery of their vehicle in a seamless and safe way. Due to the unique over-the-air connectivity of our vehicles, customers are able to unlock their new cars at a delivery parking lot via the Tesla App, sign any remaining relevant paperwork that has been placed in their car, and return that paperwork to an on-site drop-off location prior to leaving. This method provides additional convenience and comfort.

As part of the update, Tesla said that its cash position was $6.3 billion at the end of 2019, and that was prior to the recent $2.3 billion capital raise. The statement said:

We believe this level of liquidity is sufficient to successfully navigate an extended period of uncertainty. At the end of Q4 2019, we had available credit lines worth approximately $3 billion including working capital lines for all regions as well as financing for the expansion of our Shanghai factory.

No other guidance was issued in Thursday’s statement. Refinitiv had projected that revenue would rise by 30% to a level of $31.95 billion and that Tesla would turn in earnings of $7.82 per share in 2020. After the bloodbath that has been seen in the stock (and the markets in general) and the carnage that is just now starting to be seen in the jobs market and across every U.S. sector during the spreading coronavirus, it seems very difficult to imagine that Tesla’s or any other major company can still get anywhere close to what has been expected in prior weeks.

Tesla’s shares were last seen down over 55 at $404.77 in the after-hours trading on Thursday. That is against a 52-week range of $176.99 to $968.99. There are of course concerns about how low gasoline prices might be hurting Tesla as well.

Betting against Elon Musk has been a bad bet in the past. Now we just have to see if Elon Musk can navigate Tesla through the vortex during a global pandemic that is systematically destroying the global economy each day.

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