Tesla's car factories in Texas and Berlin are losing “billions of dollars right now” as supply chain disruptions hamper the electric vehicle giant’s ability to ramp up production, chief executive Elon Musk said in an interview published last week by Reuters.
“Both Berlin and Austin factories are gigantic money furnaces right now. OK? It should be like a giant roaring sound which is the sound of money on fire,” Musk said in the interview. “Berlin and Austin are losing billions of dollars right now because there’s a ton of expense and hardly any output. Getting Berlin and Austin functional and getting Shanghai back in the saddle fully are overwhelmingly our concerns."
Musk said the Texas factory is “losing insane money” at the moment because of troubles ramping up production of cars with the so-called 4680 battery, Tesla’s latest technology. Meanwhile, the tools to make cars for the traditional 2170 batteries are “stuck in a port in China.”
“Just been trying to keep the factories operating the last couple years has been a very difficult thing, like supply chain interruptions have been severe, like extremely severe,” Musk said. “The past two years have been an absolutely nightmare of supply chain disruptions, one thing after another, and we are not out of it yet.”
Since the interview, Musk has announced plans to reduce Tesla’s salaried workforce by 10% in the next three months. But the company plans to increase the number of hourly employees. Tesla’s layoffs would affect around 3.5% of its overall workforce, Musk said.
Despite the supply chain issues, Tesla is still aiming to produce 1.5 million cars this year, Musk said in April, though he cautioned that customers face long wait times for their vehicles.