Musk says Tesla’s new car factories ‘lose billions of dollars’

San Francisco, June 22 (Reuters) – Tesla Inc (TSLA.O)’s new car factories in Texas and Berlin “lose billions of dollars” as they strive to increase production due to a shortage of batteries and problems in China, Chief Executive Elon Musk said recently.

“Both Berlin and Austin factories are giant money ovens at the moment. Okay? It’s really like a giant roaring sound, that’s the sound of money on fire,” Musk said in an interview with Tesla Owners Silicon Valley, an official Tesla acknowledged club, in Austin, Texas, on May 31st.

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

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Musk said Tesla’s Texas plant produces a “small” number of cars because of challenges in boosting production of its new “4680” batteries and as a tool to make its conventional 2170 batteries “stuck” in the port of China. ” read more

The Shanghai COVID shutdowns in China “were very, very difficult,” he said. The shutdown affected car production not only at Tesla’s Shanghai plant, but also at its California plant, which used some auto parts in China. read more

“The past two years have been an absolute nightmare of supply chain disruptions, one after the other, and we are not out of it yet,” Musk said.

Tesla’s overwhelming concern, he said, is “How do we keep the factories operating so we can pay people and not go bankrupt?”

Musk said earlier this week that a 10% cut in salary at Tesla will happen over three months. The richest man in the world also said that a US recession was more likely than not. read more

Tesla began production earlier this year at 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 to begin production of its Cybertruck electric pickup trucks by mid-2023, which has been delayed.

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Reported by Hyunjoo Jin and Joe White; Edited by Leslie Adler

Our standards: The Thomson Reuters Trust Principles.

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