Tesla's newest auto plants in Texas and Berlin are "currently losing billions of dollars" as supply chain disruptions hamper the electric vehicle giant's ability to ramp up production, CEO Elon Musk said in an interview published this week.
"The Berlin and Austin factories are big blast furnaces for the money right now. OKAY? It has to be like a big roar, which is the sound of money burning," Musk said in an interview with Tesla's owner in Silicon Valley that was recorded May 30 and released Wednesday.
"Berlin also Austin are losing billions of dollars now because there is a lot of expense and almost no payoff. So our only concern is getting Berlin and Austin back to work and getting Shanghai back in the saddle. Everything else is tiny." Musk said the Texas factory was losing "crazy money" now because of problems with increasing production of cars using so-called 4680 batteries, Tesla's newest technology. Meanwhile, auto equipment for the traditional 2170 battery is "stuck in a port in China."
"Just trying to keep factories running over the last few years has been tough, and supply chain disruptions have been severe, very severe," Musk said.
"The past two years have been an fundamental nightmare of supply chain failures, one after the other, and we're still not out." In China, the resumption of Covid in recent weeks has led to lockdowns in major cities such as Shanghai, where Tesla's factory is located. Tesla plans to halt most production at the plant for the first two weeks of July to carry out repairs, Reuters reported on Wednesday.
Following the interview, Musk announced plans to cut Tesla's workforce by 10% over the next three months. But the brand plans to increase the number of employees per hour. Tesla's layoffs will affect about 3.5% of the total workforce, Musk said this week.
Despite supply chain issues, Tesla is still aiming to produce 1.5 million cars this year, Musk said in April, though he warned customers would be waiting a long time for their vehicles.
