Tesla’s New Factories Are ‘Gigantic Money Furnaces’

  • Musk said Tesla was losing billions of dollars in its new factories due to supply chain issues.
  • The CEO has complained about supply chain shortages in the past.
  • Musk is one of several auto executives who have said shortages could still hurt the industry.

Elon Musk said in a recent interview that electric car battery shortages and supply chain issues are costing Tesla billions of dollars.

“The factories in Berlin and Austin are currently gigantic furnaces of money,” Musk said in an interview with Tesla Owners Silicon Valley, who was published on YouTube Wednesday. “It’s really like a giant roaring sound, which is the sound of burning money.”

The richest man said in the interview that one of his biggest concerns is how to keep Tesla factories running without going bankrupt. Tesla recently opened factories in Texas and Berlin. The company’s largest manufacturing facility is in Fremont, California.

Last week, Musk said he planned to cut Tesla’s salaried workforce by 10%. Insider’s Isobel Asher Hamilton reported that several employees were fired as a result of the edict. The decision came after Musk said the United States was likely in a


recession

which could last 18 months.

In the interview with Tesla Owners Silicon Valley, which was released as the third part of a YouTube video series of a May 31 interview, the Tesla CEO said the company’s Texas plant had been able to manufacture only a “small” number of vehicles. He cited challenges in producing the battery 4680as well as port delays in China which affected shipments of key commodities.

Earlier this year, Shanghai entered a complete COVID-19 shutdown due to China’s zero-tolerance policy for coronavirus infections.

Musk has complained about supply chain issues in the past. Last year, the billionaire said Tesla was facing “super crazy supply chain shortages”. Earlier this week, the CEO told Bloomberg that supply chain issues had become Tesla’s biggest hurdle.

“Our constraints are much more related to raw materials and the ability to scale up production,” Musk said in an interview with Bloomberg at the Qatar Economic Forum. “As anyone who has tried to order a Tesla knows, the demand for our cars is extremely high and the waiting list is long. This is unintentional, and we are increasing production capacity as fast as we can. is humanly possible.”

Tesla is one of many automakers worried about supply chain issues. In April, Rivian CEO RJ Scaringe said a shortage of electric car batteries could soon wreak even more havoc on the auto industry than a shortage of computer chips. Last year, Ford CEO Jim Farley said the chip shortage had caused the “biggest supply shock” he had ever seen.

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