SAN FRANCISCO, June 22 (Reuters) – Tesla Inc (TSLA.O) ‘s new car plants in Texas and Berlin are “losing billions of dollars” as they struggle to increase production due to battery shortages and problems with China’s port, chief executive Director Elon Musk said in an interview published Wednesday.
“Both the Berlin and Austin factories are huge money ovens right now. Okay? It’s really like a giant roar, which is the sound of burning money, “Musk said in an interview with Tesla Owners of Silicon Valley, officially 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 published on Wednesday.
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Musk said Tesla’s Texas plant is producing a “small” number of cars because of the challenges of increasing production of the new 4680 batteries and as tools for producing the conventional 2170 batteries “stuck in a Chinese port”. read more “All this will be fixed very quickly, but it requires a lot of attention,” he said.
He said its plant in Berlin was in a “slightly better position” because it started using traditional 2170 batteries for cars made there.
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He said the COVID-19 shutdowns in Shanghai were “very, very difficult”. The shutdown affected car production not only at Tesla’s Shanghai plant, but also at the California plant, which uses some parts for vehicles made in China, he said. Read more
Tesla plans to halt most production at its Shanghai plant in the first two weeks of July to work on upgrading the site to increase production, according to an inside note seen by Reuters.
“The last two years have been an absolute nightmare of supply chain disruptions, one after the other, and we still haven’t gotten out of it,” Musk said.
Tesla’s huge concern, he said, is “How do we keep factories running so we can pay people and not go bankrupt?”
Musk said earlier this month that he had a “super bad feeling” about the economy and that the company needed to cut its staff by about 10 percent and “pause all rents around the world.” Earlier this week, he said there would be a 10% reduction in Tesla staff in three months. Read more
Tesla began production earlier this year in factories in Berlin and Texas, both crucial to the leading electric car maker’s growth ambitions.
Musk said Tesla expects to begin production of its Cybertruck electric pickups, which was postponed to mid-2023.
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Report by Hyunju Jin in San Francisco and Joe White in Detroit Edited by Leslie Adler and Matthew Lewis
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