Jun 23, 2022 - Energy & Environment

Elon Musk says new Tesla factories are "losing billions of dollars"

Elon Musk arrives for the 2022 Met Gala at the Metropolitan Museum of Art on May 2, 2022, in New York.
Elon Musk at the Metropolitan Museum of Art in New York in May. Photo: Angela Weiss/AFP via Getty Images

Tesla's new plants in Texas and Germany are "losing billions of dollars" as the electric car maker struggles with production due to supply chain disruptions and battery shortages, Elon Musk said in an interview released Wednesday.

What he's saying: "Both Berlin and Austin factories are gigantic money furnaces right now," Musk said in the interview with Tesla Owners of Silicon Valley, an official Tesla-recognized club, recorded on May 31. "It's really like a giant roaring sound, which is the sound of money on fire."

Why it matters: Musk told Bloomberg earlier this week that supply constraints are the biggest threat to growth for Tesla as he confirmed job cuts of up to 3.5%.

The big picture: Musk said in his interview with the Tesla Owners of Silicon Valley that pandemic-related shutdowns in China this year had proven "very, very difficult" for both Tesla's Shanghai factory and other plants elsewhere.

  • The Austin factory in particular was "losing insane money" as it faced challenges producing Tesla's new 4680 batteries, and "the tooling necessary" for making its conventional 2170 batteries "is stuck in China," Musk said.
  • "Overwhelmingly our concern is, how do we keep the factories operating so we can pay people and not go bankrupt?" he said.

Our thought bubble, via Axios' Joann Muller: Musk has often complained about how hard manufacturing is. Now, with the current economic situation, he's being reminded yet again.

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