New Tesla factories losing billions of dollars, Musk sayson June 23, 2022 at 4:22 am

- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -

Elon Musk said the Covid-19 lockdown in Shanghai was “very difficult” for the electric car maker.

SpaceX founder and Tesla chief executive Elon Musk visits the construction site of Tesla's gigafactory in Germany.Image source, Reuters

Elon Musk says Tesla’s new factories in Germany and the US are “losing billions of dollars” due to battery shortages and supply disruptions in China.

The multi-billionaire also called the plants in Berlin and Austin, Texas “gigantic money furnaces”.

Covid-19 lockdowns in China this year, including in Shanghai where Tesla has a huge factory, have made it increasingly difficult for manufacturers to operate.

In recent weeks Mr Musk has been warning of job cuts at the firm.

“Both Berlin and Austin factories are gigantic money furnaces right now. It’s really like a giant roaring sound, which is the sound of money on fire,” said Mr Musk, who is the electric vehicle maker’s chief executive.

The plants are “losing billions of dollars right now. There’s a ton of expense and hardly any output,” he added in an interview with the Tesla Owners of Silicon Valley, a company-recognised club.

Mr Musk said the so-called gigafactories have been struggling to increase production since they were opened earlier this year.

Tesla’s site in Austin currently produces a “tiny” number of cars, partly because some components for its batteries were “stuck” at a Chinese port “with no one to actually move it”, he said.

“This is all going to get fixed real fast but it requires a lot of attention,” Mr Musk added.

The interview was recorded at the end of last month but this part of the conversation was only posted on Wednesday.

Authorities in China locked down a number of its cities earlier this year in response to a surge in Covid-19 infections.

Tough restrictions were imposed on the movement of people and materials including in the financial, manufacturing and shipping hub of Shanghai.

Mr Musk said the shutdown of Shanghai was “very, very difficult” for Tesla, which reportedly halted most of its production at its ‘gigafactory’ in the city for weeks.

The site will largely be closed again for two weeks next month for upgrading works, according to the Reuters news agency, which cited an internal memo.

This is aimed at boosting the site’s output, bringing it closer to the company’s goal of the plant producing 22,000 cars every week, the report said.

Tesla did not immediately respond to a BBC request for comment.

This week, Mr Musk said Tesla planned to shed 3.5% of its global workforce after earlier saying that he had a “super bad feeling” about the economy.

Meanwhile, German carmaker BMW said on Thursday that it had formally begun production at its new $2.2bn (£1.8bn) facility in the northeastern Chinese city of Shenyang.

BMW said the plant, which is its third in China, will increase its annual output in the country from 700,000 to 830,000.

2px presentational grey line

You may also be interested in:

This video can not be played

To play this video you need to enable JavaScript in your browser.

- Advertisement -




Huddersfield escape Cup scare at Barrow – highlights & reporton March 27, 2022 at 6:19 pm

Huddersfield Giants score five tries to reach the last eight of the Challenge Cup with victory at Barrow.

Apple revamps syringe emoji for Covid vaccineson February 17, 2021 at 2:36 pm

The syringe icon used to be for blood donation - but Apple is now removing the blood drops.image copyrightAppleApple is changing its syringe emoji...

World Snooker Championship 2022: Neil Robertson trails, Judd Trump leadson April 24, 2022 at 5:10 pm

Tournament favourite Neil Robertson is in trouble in the second round of the World Championship, trailing Jack Lisowski 9-7 after the second session.

These states could be hit with the biggest job losses from the coronavirus pandemic

KEY POINTS When the coronavirus pandemic eventually subsides, the economic impact will be felt unevenly from one part of the country to another. The...

Morad Tahbaz, released in Nazanin deal, back in Iran jailon March 18, 2022 at 5:54 pm

Morad Tahbaz's family say they are "distraught" after hoping he would be permanently freed.Image source, MORAD TAHBAZA British-US national temporarily released from prison in...