Musk says Tesla's new car factories 'losing billions of dollars'

Musk says Tesla’s new car factories ‘losing billions of dollars’

SAN FRANCISCO, June 22 (Reuters) – Tesla Inc’s (TSLA.O) new car factories in Texas and Berlin are “losing billions of dollars” as they struggle to ramp up production due to battery shortages and problems with China’s ports, said Chief Executive Elon. Musk said in an interview published Wednesday.

“Both the Berlin and Austin factories are gigantic money furnaces right now. Okay? It really is like a giant roar, which is the sound of money burning,” Musk said in an interview with Tesla Owners of Silicon Valley. , an official company recognized by Tesla. club, in Austin, Texas, on May 31.

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

Sign up now for FREE unlimited access to Reuters.com

Musk said Tesla’s factory in Texas produces a “small” number of cars due to challenges in boosting production of its new “4680” batteries and because tooling to make its conventional 2170 batteries is “stuck in the port of China.” “. read more “This will all be fixed very quickly, but it requires a lot of attention,” he said.

He said his Berlin factory is in a “slightly better position” because it started out using traditional 2170 batteries for cars built there.

SEEKING ‘NOT GOING BANKRUPTCY’

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

Tesla plans to suspend most production at its Shanghai plant in the first two weeks of July to work on a site upgrade to increase production, according to an internal memo seen by Reuters.

“The last two years have been a complete nightmare of supply chain disruptions, one thing after another, and we’re still not out of that,” Musk said.

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

Musk said earlier this month that he had a “super bad feeling” about the economy and that the company needed to cut staff by about 10% and “pause all hiring worldwide.” Earlier this week, he said there will be a 10% cut in Tesla’s salaried staff for three months. read more

Tesla earlier this year began production at factories in Berlin and Texas, both of which are central to the growth ambitions of the leading electric car maker.

Musk said he expected Tesla to start production of its delayed Cybertruck electric pickups in mid-2023.

Sign up now for FREE unlimited access to Reuters.com

Reporting by Hyunjoo Jin in San Francisco and Joe White in Detroit Editing by Leslie Adler and Matthew Lewis

Our standards: the Thomson Reuters Trust Principles.

Leave a Comment

Your email address will not be published.