Tesla’s new plants in Texas and Germany are “losing billions of dollars” as the electric car maker struggles with production due to supply chain disruptions and battery shortages, said Elon Musk in an interview published on Wednesday.
He says: “Both the Berlin and Austin factories are giant furnaces of money right now,” Musk said in an interview with Tesla Owners of Silicon Valley, a Tesla-recognized official club, recorded on May 31st. “It’s really like a giant roaring sound, which is the sound of money on fire.”
Why it matters: Musk told Bloomberg earlier this week that supply constraints are the biggest threat to Tesla’s growth, as it confirmed job cuts of up to 3.5%.
Overview: Musk said in an interview with Tesla Silicon Valley owners that the pandemic-related closures in China this year had been “very, very difficult” for both the Shanghai Tesla plant and to other plants in other places.
- The Austin factory, in particular, was “losing crazy money” as it faced challenges in producing Tesla’s new 4680 batteries and “the tools needed” to get its conventional 2170 batteries “locked in China.” “Musk said.
- “Our overwhelming concern is, how do we keep factories running so we can pay people and not go bankrupt?” He said.
Our thought bubble, through Joann Muller of Axios: Musk has often complained about the harshness of manufacturing. Now, with the current economic situation, he is reminded again.