Tesla tells employees Model S and X production will shut down for 18 days

Tesla informed employees in its Fremont, California, factory on Friday that its Model S and Model X electric vehicle production lines will close from December 24th to January 11th, according to an email seen by CNBC.

Employees working on those lines were offered a full week of pay to cover one of the two and a half weeks of the shutdown, along with a few paid holidays. They were asked to take 5 unplanned and unpaid days off, but have the option to try to find work in other areas of the factory during those days.

They were also encouraged to “volunteer” to help make electric vehicle deliveries to customers during the shut down.

In a separate email sent to the entire company on Friday, Tesla CEO Elon Musk noted that the company is “fortunate to have the high-class problem of demand being quite a bit higher than production this quarter” and asked for employees to increase production as much as possible during the rest of the quarter.

The shutdown of the S and X lines suggests that the high demand does not extend to these older models. It’s not clear what Tesla intends to do with its Model S and X lines during the holiday shutdown. The company did not immediately respond to a request for comment.

The company has been struggling with a recall in China, and safety probe by NHTSA, and warranty expansion covering some of its high-end Model S sedans, and its luxury SUV with falcon wing doors, the Model X, this year.

Deliveries of these vehicles amounted to 15,200 in the third quarter of 2020, according to the company’s vehicle production and deliveries report from the period ending September 30 representing around 11% of vehicle deliveries during the quarter.

At an annual shareholder meeting and battery day investor presentation earlier this year, executives said that the long-anticipated Tesla Model S Plaid would start deliveries in late 2021.

Here’s what the e-mail to production employees working on the Model S and Model X SUV said (as transcribed by CNBC):

Subject: S/X Holiday Shutdown

Hi Team,

The SX lines will be shut down for the holidays starting Dec. 24th and returning Jan. 11th.

We would like you to take the opportunity to refresh or spend time with your family, so Tesla will be giving you a full week pay for the week of Jan. 4th. There will also be limited paid opportunities for you to support other shops or volunteer for deliveries during some of this time.

Dec. 23rd – last day of work before shutdown

Dec. 24th-25th – Paid holidays*

Dec. 28th-30th – Unpaid time off (may use PTO**), support deliveries or other shops.

Dec. 31st-Jan. 1st – Paid Holiday*

Jan. 4th – 8th – Paid time off (40 hours)

Jan. 11th – return to work

If you would like to volunteer for deliveries for Dec. 26th — Dec. 31st, or support other shops from Dec. 28th – Dec. 30th, please use the survey below to let us know your preference. We will do our best to accommodate your requests, but preferences are not guaranteed and will be granted on a first come first serve basis.

Here’s the separate email from Musk to all employees (as transcribed by CNBC):

Subject: Vehicle Production

We are fortunate to have the high class problem of demand being quite a bit higher than production this quarter.

To ensure that we have the best possible customer outcome and earn the trust of the customers and investors who have placed their faith and hard-earned money with us, we need to increase production for the remainder of the quarter as much as possible.

I would only send this note if it really mattered.

Super appreciated,

Elon

Btw, please send me a note directly if you see ways to improve output, but feel that your voice is not being heard.