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HomeEconomyElon Musk Says New Tesla Car Factories Are Losing Billions of Dollars,...
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Elon Musk Says New Tesla Car Factories Are Losing Billions of Dollars, Calls Them “Money Furnaces” MPNRC

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Tesla Inc.’s new car factories in Texas and Berlin are losing “billions of dollars” as they struggle to ramp up production due to battery shortages and China port issues, Chief Executive Elon Musk said in an interview published Wednesday. are doing.

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“Both the Berlin and Austin factories are huge money furnaces right now. OK? It really is a huge roar,” Musk said in an interview with the Tesla Owners of Silicon Valley, an official Tesla-accrediting club in Austin, Texas, on May 31. The sound is like the sound of money on fire.”

The club split its interview with Musk into three parts, the last of which was released on Wednesday.

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Musk said Tesla’s Texas factory produces “smaller” cars because of challenges in ramping up production of its new “4680” battery and that equipment to make its traditional 2170 battery is “stuck in port in China.” “It’s all going to recover real fast, but it requires a lot of attention,” he said.

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He said that its Berlin factory is in “slightly better condition” as it started with the use of conventional 2170 batteries for cars made there.

The quest for ‘not going bankrupt’

He said the COVID-19-related shutdowns in Shanghai were “very, very difficult.” The shutdown affected car production not only at Tesla’s Shanghai factory, but also at its California plant, which uses some vehicle parts made in China, he said.

According to an internal memo seen by Reuters, Tesla plans to suspend most production in the first two weeks of July in order to work on site upgrades to boost production at its Shanghai plant.

“The last two years have been an absolute nightmare of supply chain interruptions after another, and we’re not out of it yet,” Musk said.

Tesla’s extreme concern, he said, “how do we keep factories running so we can pay people and not go bankrupt?”

Musk said earlier this month he had “very bad feelings” about the economy and needed the company to cut staff by about 10% and “stop all hiring around the world.” Earlier this week, he said a 10% cut in salaried employees at Tesla would happen in three months.

Tesla began production earlier this year at factories in Berlin and Texas, both crucial to the top electric carmaker’s growth ambitions.

Musk said he expects Tesla to begin production of its Cybertruck electric pickup trucks, which have been delayed to mid-2023.

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