Tesla is looking for a one-year deferral on its obligation to create 1,500 jobs in New York.
The company said coronavirus restrictions have kept it from fulfilling its contract with the state. In February, Tesla reported it had already exceeded its jobs target in New York state.
Less than a month later the coronavirus and the governor's executive order forced it to temporarily suspend most production in Buffalo. With the April 30 contractual deadline now here, most of the jobs are currently gone.
"I think that there's clearly an uncertain future ahead," CEO Elon Musk said during a Wednesday investors call. "It's a bit of a bumpy road. But I think the long-term prospects are extremely good."
The state said it’s considering a number of steps to provide relief to all companies that have economic development contracts with it. Qualifying partners would be able to opt-in to the deferral on benchmarks for 12 months, loan payments for at least six months and certain annual reporting and application deadlines would be pushed to August.
“The COVID-19 pandemic and resulting shutdowns to save lives has upended businesses across the globe and in New York state," Empire State Development Spokesperson Pamm Lent said. "To help mitigate those impacts, and provide reasonable and fair accountability, we are considering delaying job creation requirements tied to economic development programs for 12 months. This allows companies an opportunity to resume their job creation targets established before the crisis struck."
Tesla indicated in a federal Securities and Exchange Commission filing it plans to seek that deferral. The company said, by next year, it's confident it can avoid the $41 million annual penalty tied to not reaching the jobs benchmark, since it had exceeded the goal prior to the executive order.
During the investor call, the company pointed out it had reached a new production milestone prior to the shutdown, making enough solar tiles in a week for 1,000 solar roofs. The bigger concern is installation, which Musk said is not possible right now.
"We were actually gaining interest momentum with the Solar Roof before COVID, and COVID essentially shut us down, both from the ability to install and the ability to get permits,” he said.
He was optimistic about the company and solar roof long-term, predicting by the end of the year Tesla could be installing 1,000 roofs per week. However, the company acknowledged, even after production resumes, there will be uncertainty about the global economy and consumer confidence.
Musk railed against government stay-at-home orders, calling them "fascist."
"It will cause great harm, not just to Tesla, but to many companies. And while Tesla will weather the storm, there are many small companies that will not. And all people's — everything people have worked for their whole life is going to get — is being destroyed in real time. And we're going to have many suppliers — or have many suppliers that are having super hard times, especially the small ones, and it's causing a lot of strife to a lot of people," he said.