Elon Musk says Tesla’s new car factories are’ losing billions of dollars’

Tesla Inc’s new car factories in Texas and Berlin are “losing billions of dollars” as they struggle to increase production because of a shortage of batteries and China port issues, chief executive 
Elon Musk said in an interview published on Wednesday.

“Both Berlin and Austin factories are gigantic money furnaces right now. Okay? It’s really like a giant roaring sound, which is the sound of money on fire,” Musk said in an interview with Tesla Owners of Silicon Valley, an official Tesla-recognized club, in Austin, Texas, on May 31.

The club divided its interview with Musk into three parts, the last of which was released on Wednesday.

Musk said Tesla’s Texas factory produces a “tiny” number of cars because of challenges in boosting production of its new “4680” batteries and as tools to make its conventional 2170 batteries are “stuck in port in China.”

Mr Musk said the so-called gigafactories have been struggling to increase production since they were opened earlier this year.

Tesla’s site in Austin currently produces a “tiny” number of cars, partly because some components for its batteries were “stuck” at a Chinese port “with no one to actually move it”, he said.

“This is all going to get fixed real fast but it requires a lot of attention,” Mr Musk added.

The interview was recorded at the end of last month but this part of the conversation was only posted on Wednesday.

Authorities in China locked down a number of its cities earlier this year in response to a surge in Covid-19 infections.

Tough restrictions were imposed on the movement of people and materials including in the financial, manufacturing and shipping hub of Shanghai.

Mr Musk said the shutdown of Shanghai was “very, very difficult” for Tesla, which reportedly halted most of its production at its ‘gigafactory’ in the city for weeks.

Musk said earlier this week that a 10% cut in salaried staff at Tesla will happen over three months. The world’s richest man also said a U.S. recession was more likely than not.

Tesla earlier this year started production at the factories in Berlin and Texas, both of which are critical to the growth ambitions of the top electric car maker.

Musk said he expected Tesla would start production of its Cybertruck electric pickup trucks, which has been delayed, in mid-2023. 

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