Elon Musk Says Tesla's New Factories Are "Money Furnaces" That Are "Losing Billions of Dollars"

Elon Musk Says Tesla’s New Factories Are “Money Furnaces” That Are “Losing Billions of Dollars”

Tesla’s new factories 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 on Wednesday.

What is he saying: “The factories in Berlin and Austin are giant money furnaces now,” said Musk in the interview with Tesla owners of Silicon Valley, an official Tesla-recognized club, recorded on May 31. “It’s really like a giant roar, which is the sound of money on fire.”

Why does it matter: Musk told Bloomberg earlier this week that supply restrictions are the biggest threat to Tesla’s growth, as it confirmed job cuts of up to 3.5%.

The big picture: Musk said in his interview with Tesla owners in Silicon Valley that the pandemic-related shutdowns in China this year have proved “very, very difficult” for both Tesla’s Shanghai factory and other plants elsewhere.

  • The Austin plant, in particular, was “losing insane money” as it faced challenges producing Tesla’s new 4680 batteries and “the tools necessary” to manufacture its conventional 2170 batteries “are stuck in China,” Musk said.
  • “Our biggest concern is how do we keep the factories running so we can pay people and not go bankrupt?” he said.

Our thought bubble, via Joann Muller of Axios: Musk has always complained about how difficult manufacturing is. Now, with the current economic situation, he is being remembered once again.

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