Tesla’s New Factories Losing Billions of Dollars, Says Musk

Elon Musk's India Dream

Elon Musk stated in an interview published this week that Tesla’s newest car factories in Texas and Germany are losing “billions of dollars right now” as supply chain disruptions impede the electric vehicle giant’s ability to ramp up production.

“Both Berlin and Austin factories are currently enormous money-making furnaces. OK?” Musk stated in an interview with Tesla Owners Silicon Valley, which was recorded on May 30 and published on May 31 that the sound should be comparable to “the sound of money on fire”.

“Berlin and Austin are currently losing billions of dollars due to excessive expenditures and a lack of output. We are preoccupied primarily with restoring Berlin and Austin to full functionality and regaining Shanghai’s footing. Everything else is relatively insignificant.”

Musk stated that the Texas factory is currently “losing insane amounts of money” due to production problems with Tesla’s latest battery technology, the so-called 4680 battery. In the meantime, the tools needed to manufacture cars for the traditional 2170 batteries are “stuck in a Chinese port.”

Musk stated, “Trying to keep factories operational over the past few years has been a very difficult task, as supply chain interruptions have been severe, like extremely severe.”

The past two years have been a nightmare of supply chain disruptions, one after the other, and we are not yet out of the woods.

In recent weeks, the resurgence of Covid in China led to lockdowns in major cities such as Shanghai. Tesla’s plant is located in Shanghai, China. Reuters reported on Wednesday that Tesla plans to suspend the majority of production at this factory during the first two weeks of July in order to perform upgrades.

Musk has since announced that Tesla will reduce its salaried workforce by 10% over the next three months. However, the company intends to increase its hourly workforce. Musk stated this week that Tesla’s layoffs would affect approximately 3.5 percent of its total workforce.

Musk stated in April that despite the supply chain issues, Tesla still intends to produce 1.5 million vehicles this year, but customers should expect lengthy wait times.

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