Proposed Tesla Factories are Losing Billions of Dollars, Musk says

Image Source: Bloomberg

Proposed Tesla factories in Germany and the US are “losing billions of euros” due to battery shortages and supply disruptions in China, Elon Musk asserts. The billionaire also referred to the Austin, Texas, and Berlin factories as “gigantic money furnaces.”

Manufacturing has been more challenging due to Covid-19 lockdowns in China this year, notably in Shanghai, where Tesla has a sizable facility. In addition, Mr. Musk has been announcing job layoffs at the company in recent weeks.

“Right now, proposed Tesla factories in Berlin and Austin are both enormous money furnaces. It sounds like money is on fire and makes a huge roaring noise, “said Mr. Musk, the CEO of the manufacturer of electric vehicles.

The vegetation is “billions of money are currently being lost. There are numerous expenses but very few results, “In an interview with the Tesla Owners of Silicon Valley, a group recognized by the company, he added.

Since they were inaugurated earlier this year, the proposed Tesla factories, according to Mr. Musk, have had difficulty increasing production.

Because some battery-related components were “trapped” at a Chinese port “with no one to actually transport it,” he said, Tesla’s Austin plant only presently produces a “small” number of cars.

Mr. Musk continued, “This will all get repaired quickly, but it demands a lot of attention.”

Although this portion of the interview was only posted on Wednesday, the entire interview was recorded near the end of last month.

In response to a spike in Covid-19 infections, Chinese authorities shut down several major cities earlier this year. The movement of people and goods was subject to stringent restrictions, even in Shanghai, manufacturing, finance, and shipping center.

Tesla stopped most of its manufacturing at its Shanghai “gigafactory” for weeks due to the closure, which Mr. Musk described as “very, very tough” for Tesla.

According to an internal memo from the Reuters news agency, the site will again be unavailable for upgrade work for two weeks next month. According to the article, this is done to increase the site’s output and get it closer to the company’s objective of having the plant produce 22,000 cars every week.

Due to rising costs for raw materials like lithium and aluminum, the business increased the price of its whole lineup of automobiles in the US by about 5% last week.

After declaring earlier that he had a “very awful feeling” about the economy, Mr. Musk indicated this week that Tesla planned to reduce its global workforce by 3.5 percent.

On Thursday, a German automaker, BMW, announced that formal production has started at its new $2.2 billion (£1.8 billion) facility in Shenyang, a city in northeastern China. BMW claimed that the facility, which would be it’s third in China, will boost production from 700,000 to 830,000 vehicles annually.


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Anthony Carter

I’m Anthony and I finished my degree graduate studies on Public Administration and I spend most of my free time in contributing written works about community development, public administration and lifestyle.

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