Musk says Tesla’s factories in Berlin and Texas are ‘big money furnaces’

“The past two years have been an absolute nightmare of supply chain disruptions, one thing at a time, and we are not out of it yet,” said Tesla CEO Elon Musk.

Patrick T. Fallon | Reuters

Tesla CEO Elon Musk said in an interview published Wednesday that the newest auto plants in Texas and Berlin are losing “billions of dollars right now” as supply chain disruptions hamper the electric car giant’s ability to ramp up production.

“Both the Berlin and Austin factories are giant cash kilns right now. Well? It must be like a giant roar and it’s the sound of burning money,” Musk said in an interview with Tesla Owners Silicon Valley, which was taped on May 30. .

“Berlin and Austin are losing billions of dollars right now because there’s so much expense and hardly any output. Restarting Berlin and Austin and getting Shanghai back fully in the saddle is very much our concern. Everything else is basically a very small thing.”

Musk said the Texas plant is “losing crazy money” right now due to problems ramping up production of cars with the so-called 4680 battery, Tesla’s latest technology. Meanwhile, the tools needed to make cars for conventional 2170 batteries are “stuck at a port in China”.

“Just trying to keep factories running for the past two years has been very difficult, like severe disruptions in the supply chain, like very severe,” Musk said.

“The past two years have been quite a nightmare for supply chain disruptions, one thing at a time, and we are not out of it yet.”

In China, the emergence of Covid in recent weeks has led to the closure of major cities such as Shanghai, where the Tesla plant is located in the country. Tesla plans to suspend most production at that plant in the first two weeks of July for upgrades, Reuters reported on Wednesday.

Since the interview, Musk has announced plans to cut Tesla’s paid workforce by 10% in the next three months. But the company plans to increase the number of employees every hour. Tesla layoffs Musk said this week that about 3.5% of its total workforce.

Despite supply chain problems, Tesla still aims for it Production of 1.5 million cars this yearMusk said in April, though he cautioned that customers face long waiting times for their cars.