Tuesday, July 5, 2022
HomeBusinessMusk says Tesla Factories are Losing Billions of Dollars

Musk says Tesla Factories are Losing Billions of Dollars

Due to battery shortages and supply interruptions in China, Elon Musk claims that Tesla’s planned plants in Germany and the US are “losing billions of euros.”

The billionaire also referred to the factories in Austin, Texas, and Berlin as “gigantic money furnaces.”

Manufacturing has become more challenging as a result of the 19 lockdowns that have occurred in China this year, including one in Shanghai where Tesla has a sizable facility.

Mr. Musk has been announcing job layoffs at the company in recent weeks.

“Right now, the factories in Berlin and Austin are both enormous money furnaces. It sounds like money is on fire and makes a huge roaring noise “said Mr. Musk, the CEO of the manufacturer of electric vehicles.

The vegetation is “billions of dollars are currently being lost. There are numerous expenses but very few results “In an interview with the Tesla Owners of Silicon Valley, a group recognized by the business, he noted.

Since they were inaugurated earlier this year, the so-called gigafactories, according to Mr. Musk, have had difficulty increasing production.

Because some battery-related components were “trapped” at a Chinese port “with no one to actually transport it,” he added, Tesla’s Austin plant only presently produces a “small” number of cars.

Mr. Musk continued, “This is going to all get repaired real soon but it demands a lot of attention.”

Although this portion of the interview was just posted on Wednesday, the entire interview was taped near the end of last month.

In response to a spike in Covid-19 infections, Chinese authorities earlier this year shut down a number of major cities.

The movement of people and goods was subject to stringent restrictions, even in Shanghai, a center of manufacturing, finance, and shipping.

Tesla apparently stopped the majority of its manufacturing at its Shanghai “gigafactory” for weeks as a result of the closure, which Mr. Musk described as “very, very tough” for Tesla.

According to an internal document obtained by the Reuters news agency, the site will once again be mainly unavailable for two weeks next month for upgrade work.

According to the article, this is done to increase the site’s productivity and get it closer to the company’s objective of having the factory produce 22,000 cars every week.

After declaring previously that he had a “very awful feeling” about the economy, Mr. Musk indicated this week that Tesla planned to reduce its worldwide staff by 3.5 percent.

BMW, a German automaker, said on Thursday that formal production has started at its new $2.2 billion (£1.8 billion) facility in Shenyang, a city in northeastern China.

BMW said that the facility, which would be its third in China, will boost production there from 700,000 to 830,000 vehicles annually.

Bob Carlson
Bob Carlson
Bob Carlson is a business journalist, with over a decade of experience in the trenches of reporting up-to-date business news for publications all over the world. With a wealth of knowledge at his back, Bob strives to bring the most important insights into the business world for TheOptic daily.
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