Elon Musk Admits Tesla Lost Billions Of Dollars, Factories In Texas And Berlin Only Burn Money

JAKARTA - Tesla Inc's new car factories in Texas and Berlin are suffering "billions of dollars in losses" as they struggle to increase production due to battery shortages and Chinese port problems. This was stated by Chief Executive Elon Musk in an interview published on Wednesday, June 22.

"Both the Berlin and Austin factories are giant money furnaces right now. Okay? It's really like a giant roaring sound, which is the sound of money burning," Musk said in an interview with Tesla Owners of Silicon Valley, an official recognized by the Tesla club, in Austin, Texas, on May 31.

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

Musk said Tesla's Texas plant is producing a "small" number of cars because of the challenges of scaling up production of its new "4680" batteries and as a means of making its conventional 2170 batteries "stuck in a port in China."

"This will all be fixed very quickly, but it needs a lot of attention," Musk said in the interview.

He said his Berlin factory was in a "slightly better position" because it started using traditional 2170 batteries for cars made there.

He said the COVID-19-related shutdown in Shanghai was "very, very difficult." The shutdown affected car production not only at Tesla's plant in Shanghai, but also at its plant in California. Because the factory there uses some vehicle parts made in China.

Tesla plans to suspend most production at its Shanghai plant in the first two weeks of July to work on site upgrades to boost production, according to an internal memo seen by Reuters.

"The past two years have been an absolute nightmare of supply chain disruptions, one after the other, and we haven't come out of it yet," Musk said.

Tesla's biggest concern, according to Musk, is "How do we keep the factory running so we can pay people and don't go bankrupt?"

Musk said earlier this month he had a "very bad feeling" about the economy and that the company needed to cut staff by about 10% and "stop all hiring worldwide." Earlier this week, he said a 10% cut in salaried staff at Tesla would occur over three months.

Tesla earlier this year started production at factories in Berlin and Texas, both of which are crucial to the top electric car maker's growth ambitions.

Musk said he hoped Tesla would start production of the Cybertruck electric pickup truck, which has been delayed, by mid-2023.