Elon Musk Says New Tesla Plants Are Losing Billions

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Elon Musk said Tesla Inc.’s new plants in Germany and Texas are losing “billions of dollars” as the electric vehicle manufacturer tries to ramp up production.

“Both Berlin and Austin factories are gigantic money furnaces right now,” the chief executive officer said in a video interview with Tesla Owners of Silicon Valley, posted online June 22.

The comments, part of a discussed discussion filmed May 31, tools The reductions will affect about 10% of Tesla’s salaried workers over the next three months, or about 3.5% of its global workforce, Musk told Bloomberg News Editor-in-Chief John Micklethwait at the Qatar Economic Forum on June 21.

The SUVs that use the new 4680 cells and structurally integrated battery pack. The SUVs with the older 2170 cells in Austin – but the tooling required for that got stuck in China, Musk said.

“This can be very fast, but it requires a lot of attention, and it will take more effort to get this factory in the first place,” Musk said of the Austin factory. Berlin is in a “slightly better position” because Tesla outfitted it to build cars with the 2170 cells, he said.

Prioritizing building new factories in different locations around the world More factories also give Tesla a higher ceiling for how many cars it can build per year.

Tesla’s struggles in getting the Austin and Berlin factories up to its Shanghai plant, Musk said. At the time of last month’s interview, the Chinese government’s restrictions, as well as persistent supply chain headaches.

“The past two years have been the absolute nightmare of supply chain interruptions, one thing after another, and we’re not out of it yet. Overwhelmingly our concern is how do we keep the factories operating so we can pay people and not go bankrupt, ”Musk said. “The COVID shutdowns in China were very, very difficult, to say the least.”

Since the interview, Tesla has more than tripled production at its plant in China.

Morgan Stanley analyst Adam Jonas on June 22 cited the China manufacturer’s damage to the automaker to $ 1,200 a share from $ 1,300. He maintained his overweight rating on Tesla.

Tesla’s shares closed down less than 1%, to $ 708.26, June 22 in New York.

– With the assistance of Jonathan Roeder.

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