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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

·2 min read
Elon Musk
Yasin Ozturk/Anadolu Agency via Getty Images
  • Musk said Tesla was losing billions of dollars at its new factories because of supply-chain snags.

  • The CEO has complained about supply-chain shortages in the past.

  • Musk is one of many auto executives who have said shortages may further hurt the industry.

Elon Musk said during a recent interview that electric-car-battery shortages and supply-chain snags were 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, which was posted on YouTube Wednesday. "It's really like a giant roaring sound, which is the sound of money on fire."

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

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

In the 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 had been able to manufacture only a "tiny" number of vehicles. He cited challenges with production of the 4680 battery, as well as port delays in China that have affected shipments of key goods.

Earlier this year, Shanghai went into a full COVID-19 shutdown because of China'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 had 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."

Tesla is one of many carmakers to express concern over supply-chain snags. In April, Rivian CEO RJ Scaringe said 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 had caused the "greatest supply shock" he'd ever seen.

Read the original article on Business Insider