Follow us:

10h Sir Vince Cable returns to politics as European Movement VP
13h Britons set for further travel misery as airlines to axe more flights
5h Crowds flock to the capital to celebrate 50th anniversary of Pride
18h Fans delight after Rihanna and ASAP Rocky seen in London barber shop
01 July 2022 Holland Park School issued termination warning notice
7h Chris Pincher seeking ‘medical support’ amid groping claims

Elon Musk says his German and US factories are losing “billions of dollars”

Elon Musk says his factories are “money furnaces”

/ PA Archive
23 June 2022

he impact of supply chain problems in China on Tesla’s new battery factories in the US and Germany mean they are losing billions of dollars, according to the company’s multi-billionaire founder.

Elon Musk said in an interview that “It’s really like a giant roaring sound, which is the sound of money on fire.” Speaking to the Tesla Owners of Silicon Valley, a club for owners of the company’s iconic electric cars, Musk added: “Both Berlin and Austin factories are gigantic money furnaces right now.”

The entrepreneur blamed Covid-related shutdowns in China, pointing in particular to the cargo hub of Shanghai, which he said was “very, very difficult” for Tesla, limiting production at the so-called gigafactories with components stranded in port. According to newswire reports, the company plans to use the downtime to update facilities to get nearer its target of producing around 22,000 cars a week.

Tesla warned this week warned of plans to lay off 3.5% of its global workforce after Musk said separately he had a “super bad feeling” about the economy. He has branded supply constraints as the biggest threat to growth at the company.

“Overwhelmingly, our concern is, how do we keep the factories operating so we can pay people and not go bankrupt?” he said.

Musk said he expected the problems at the Austin plant to “get fixed real fast”, but warned that the process “requires a lot of attention and it will take “more effort to get this factory to high volume production than it took to build it in the first place.” He said the number of cars it was currently producing was “tiny”.

The difficulties at the Berlin factory were not as severe, with Musk saying it was in a “slightly better position”. The German factory uses a more conventional battery, the “2170”, while the Austin plant used the more up-to-date “4680” model, which is more exposed to the supply chain problems.

Musk, one of the world’s richest men, is no stranger either to controversy or to making news. His $44bn bid for Twitter is caught in delays relating to the number of active users on the social networking site. There have also been doubts about how he will fund the bid.

The entrepreneur said in February 2021 that Tesla would accept Bitcoin as payment for its cars, before withdrawing the policy in May.

Register for free to continue reading

Sign up for exclusive newsletters, comment on stories, enter competitions and attend events.