“The past two years have been an absolute nightmare of supply chain disruptions, one thing after another, and we’re not out of it yet,” said Tesla CEO Elon Musk.
Patrick T. Fallon | Reuters
Tesla’s newest car factories in Texas and Berlin are losing “billions of dollars right now” as supply chain disruptions hamper the electric vehicle giant’s ability to ramp up production, chief executive Elon Musk said in an interview published Wednesday.
“Both Berlin and Austin factories are gigantic money furnaces right now. Okay? It should be like a giant roaring sound that sounds like money on fire,” Musk said in an interview with Tesla Owners Silicon Valley, which was recorded on May 30. General Chat Chat Lounge
“Berlin and Austin are losing billions of dollars right now because there is a ton of expense and hardly any output. Getting Berlin and Austin functional and getting Shanghai back in the saddle are completely overwhelming our concerns. Everything else is a very small thing basically.”
Musk said the Texas factory is “losing insane money” at the moment because of troubles ramping up production cars with the so-called 4680 battery, Tesla’s latest technology. Meanwhile, the traditional 2170 batteries for the tools to make cars are “stuck in a port in China.”
“Just trying to keep the factories operating the last couple years has been a very difficult thing, like supply chain interruptions have been severe, like extremely severe,” Musk said.
“The past two years have been an absolute nightmare of supply chain disruptions, one thing after another, and we are not out of it yet.”
In China, a resurgence of Covid’s in recent weeks has led to lockdowns in major cities such as Shanghai, where Tesla’s plant is in the country. Tesla plans to suspend most of its production at upgrades that carry out the factory in the first two weeks of July, Reuters reported on Wednesday.
Since the interview, Musk has announced plans to reduce Tesla’s salaried workforce by 10% in the next three months. But the company plans to increase the number of hourly employees. Tesla’s layoffs will affect about 3.5% of its overall workforce, Musk said this week.
Despite the supply chain issues, Tesla is still aiming to produce 1.5 million cars this year, Musk said in April, though he cautioned that customers face long wait times for their vehicles.
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