Tesla: factories in Austin and Berlin “lose billions of dollars”, according to Elon Musk

The sky is not totally blue for Tesla. Although the electric car manufacturer is doing better and better, with a profit of 3.3 billion dollars in the first quarter of 2022 and the commissioning of the Gigafactory in Berlin in March, it must however face significant challenges . It is mainly the global shortage of semiconductors and the rebound of the Covid-19 pandemic in China that are weighing on the accounts of the American firm.

In this context, the losses are proving to be particularly heavy at this time for Tesla. In a video interview with Tesla Owners of Silicon Valley, Elon Musk assured that his new factories in Austin and Berlin “lose billions of dollars”. The American billionaire cites difficulties in supplying batteries and port problems in China to explain this situation.

New 4680 batteries slow Tesla down

With the caustic tone that characterizes him, Elon Musk did not go overboard to summarize the current situation. “The factories in Berlin and Austin are gigantic money furnaces right now. Okay? It’s really like a giant roar, similar to the sound of burning money”Elon Musk said during the interview.

In detail, the boss of Tesla and SpaceX indicates that the electric car manufacturer is producing a “little” number of vehicles due to difficulties in ramping up production of its new 4680 batteries and the fact that tools to manufacture its traditional 2170 batteries are “stranded in a port in China”. “All this will be settled very quickly, but it requires a lot of attention”did he declare.

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Dismissal of 10% of the workforce

The entrepreneur specified that his Berlin plant was in a “slightly better position”, because it started by using the traditional 2170 batteries in its production line. Launched last March, the production of the Model Y in the Berlin Gigafactory has just reached 1000 copies in one week. However, this symbolic bar should have been crossed at the end of April 2022. If Berlin maintains this milestone of 1,000 cars/week, nearly 50,000 vehicles will be added to the American manufacturer’s annual production. This surplus of Model Y would come to relieve the Shanghai Gigafactory, which could then concentrate on the Chinese market and the surrounding regions.

Despite the hope that the situation is improving, it’s not time to celebrate at Tesla. A few weeks ago, Elon Musk told the company’s executives that he wanted to lay off 10% of his workforce, or nearly 10,000 employees, due to a “very bad feeling” on the economy. “How can we keep factories going to pay people, and not go bankrupt?”he asked Tesla Owners of Silicon Valley. “The last two years have been an absolute nightmare of supply chain disruptions, one thing after another, and we’re not out of it yet”he added.

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