Musk says Tesla’s new car factories “lose billions of dollars”

SAN FRANCISCO, June 22 (Reuters) – Tesla Incs (TSLA.O) new car factories in Texas and Berlin “lose billions of dollars” while struggling to increase production due to lack of batteries and problems with ports in China, says CEO Elon. said Musk in an interview published Wednesday.

“Both the Berlin and Austin factories are giant money furnaces right now. Okay? It̵[ads1]7;s really like a giant roaring sound, which is the sound of money on fire,” Musk said in an interview with Tesla Owners of Silicon Valley, an official Tesla official. recognized club, in Austin, Texas, May 31st.

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

Musk said that Tesla’s Texas plant produces a “small” number of cars due to challenges in increasing production of its new “4680” batteries and that tools for making its conventional 2170 batteries “are stuck in China.” read more “This will be fixed very quickly, but it requires a lot of attention,” he said.

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

APPLYING TO “NOT GO BANKRUPTCY”

He said the COVID-19-related shutdowns in Shanghai “were very, very difficult.” The closure affected car production not only at Tesla’s Shanghai plant, but also at the California plant, which uses some vehicle parts made in China, he said. read more

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

“The last two years have been an absolute nightmare with supply chain disruptions, one thing after another, and we are not out of it yet,” 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 had to cut employees by around 10% and “stop all employment worldwide.” Earlier this week, he said that a 10% cut in paid employees at Tesla will take place over three months. read more

Earlier this year, Tesla started production at the factories in Berlin and Texas, both of which are crucial to the growth ambitions of the best electric car manufacturer.

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

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

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