Monday, 27 Jun, 2022

Elon Musk says Tesla's new factories are 'gigantic money furnaces' that are losing billions of dollars from EV battery shortages and supply-chain snags

Yasin Ozturk/Anadolu Agency via Getty ImagesElon Musk said Tesla is losing billions of dollars at its new factories due to supply-chain snags.The CEO ..

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  • Elon Musk said Tesla is losing billions of dollars at its new factories due to supply-chain snags.
  • The CEO has complained about supply-chain shortages in the past.
  • Musk is one of many auto executives that have warned shortages could further hurt the industry.

Elon Musk warned during a recent interview that electric-car battery shortages and supply-chain snags are costing Tesla billions of dollars.

"Both Berlin and Austin factories are gigantic money furnaces right now," Musk said in an interview with Tesla Owners Silicon Valley that was posted on Youtube on Wednesday. "It's really like a giant roaring sound, which is the sound of money on fire."

The richest man in the world said during the interview that one of his biggest concerns has been how to keep Tesla factories running without going bankrupt. Tesla recently opened factories in Texas and Berlin, Germany. Though, the company's largest manufacturing facility is based in Fremont, California.

Last week, Musk said he is planning to cut salaried staff at Tesla by 10%. Insider's Isobel Asher Hamilton reported that several employees have already been laid off as a result of the edict. The decision came after Musk said the US is probably in a recession that could last 18 months.

In the recent interview with Tesla Owners Silicon Valley, which was released as the third part of a series of YouTube videos from a May 31 interview, the Tesla CEO said the company's Texas plant has only been able to manufacture a "tiny" number of vehicles. He cited challenges with production of the 4680 battery, as well as port delays in China that have impacted shipments of key goods. Earlier this year, Shanghai went into a full COVID shutdown due to the nation's zero-tolerance policy for coronavirus infections.

Musk has complained about supply-chain snags in the past. Last year, the billionaire said Tesla faced "super crazy supply-chain shortages." Earlier this week, the CEO told Bloomberg that supply-chain issues have become Tesla's biggest hurdle.

"Our constraints are much more in raw materials and being able to scale up production," Musk said in an interview with Bloomberg at the Qatar Economic Forum. "As anyone knows who has tried to order a Tesla, the demand for our cars is extremely high and the wait list is long. This is not intentional and we're increasing production capacity as fast as humanly possible," he added. 

Tesla is one of many carmakers to express concern over supply-chain snags. In April, Rivian CEO RJ Scaringe warned that a shortage of electric-car batteries could soon wreak even more havoc on the automobile industry than the  computer chip shortage. Last year, Ford CEO Jim Farley said the chip shortage has caused the "greatest supply shock" he's ever seen.

Read the original article on Business Insider
By: [email protected] (Grace Kay)
Title: Elon Musk says Tesla's new factories are 'gigantic money furnaces' that are losing billions of dollars from EV battery shortages and supply-chain snags
Sourced From: businessinsider.com/elon-musk-tesla-new-factories-money-furnaces-supply-chain-shortages-2022-6
Published Date: Wed, 22 Jun 2022 20:43:00 +0000

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