Thursday, 7 July, 2022

New Tesla factories losing billions of dollars, Musk says

New Tesla factories losing billions of dollars, Musk says

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Elon Musk says Tesla's new factories in Germany and the US are "losing billions of dollars" due to battery shortages and supply disruptions in China.

The multi-billionaire also called the plants in Berlin and Austin, Texas "gigantic money furnaces".

Covid-19 lockdowns in China this year, including in Shanghai where Tesla has a huge factory, have made it increasingly difficult for manufacturers to operate.

In recent weeks Mr Musk has been warning of job cuts at the firm.

"Both Berlin and Austin factories are gigantic money furnaces right now. It's really like a giant roaring sound, which is the sound of money on fire," said Mr Musk, who is the electric vehicle maker's chief executive.

The plants are "losing billions of dollars right now. There's a ton of expense and hardly any output," he added in an interview with the Tesla Owners of Silicon Valley, a company-recognised club.

Tesla's site in Austin currently produces a "tiny" number of cars, partly because some components for its batteries were "stuck" at a Chinese port "with no one to actually move it", he said.

The interview was recorded at the end of last month but this part of the conversation was only posted on Wednesday.

Authorities in China locked down a number of its cities earlier this year in response to a surge in Covid-19 infections.

Tough restrictions were imposed on the movement of people and materials including in the financial, manufacturing and shipping hub of Shanghai.

The site will largely be closed again for two weeks next month for upgrading works, according to the Reuters news agency, which cited an internal memo.