Tesla plants in Germany and Texas are burning money. Not literally of course, but these factories are losing “billions of dollars,” according to CEO Elon Musk in a recent interview.
Elon Musk says that Tesla’s massive factories in Texas and Germany are losing a ton of money due to the ongoing supply chain crisis plaguing the planet in an interview with the completely unbiased Tesla Owners of Silicon Valley. The 3-part interview—titled “Elon Musk Unfiltered”—was conducted on May 31 at the Tesla Gigafactory 5 in Austin and was published on YouTube yesterday. Between jabs at journalism and the Tesla Owners of Silicon Valley members laughing a little too hard at Musk’s bland attempts at humor, Musk discusses the issues Tesla has been having manufacturing cars in its Austin and Berlin gigafactories. he claims that those factories have been losing billions.
“The past two years have been an absolute nightmare of supply chain interruptions, one thing after another, and we’re not out of it yet. Overwhelmingly our concern is how do we keep the factories operating so we can pay people and not go bankrupt, and then everything else is nice to have,” Musk said around the 6-minute mark. He continued later on: “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.”
Musk cited the Covid shutdowns in China—which affected Tesla’s Shanghai “gigafactory”—as a major source of this financial hemorrhaging. He also explained that the supplies needed to build Teslas with 2170 battery cells were stuck in China’s ports. “We had the Shanghai factory inop, we’ve got the tooling to enable this factory stuck in port in China with no one to actually move it,” Musk said. This all led to Tesla’s output to slow down, but Musk believes that the problem will all be fixed “real fast,” whenever that may be.
The global supply chain crisis is sending devastating ripple effects across the globe, as everything from baby formula to computer chips are not meeting the current demand. Tesla has already seen long wait lists for consumers interested in buying one of it cars—though that was the case before the pandemic—and with the current challenges plaguing the company, that list is going to get longer.