According to Elon Musk, the new Tesla Inc. plants in Germany and Texas will lose “billions of dollars” when ramping up production.
“The factories in Berlin and Austin are both huge money incinerators right now,” said the Tesla boss in a May 31 video interview that the Tesla Owners of Silicon Valley customer association posted online on Wednesday.
“It’s really like a gigantic roar, this sound of burning money.” In Texas, only a tiny number of cars would roll off the assembly line at the moment.
There are difficulties in ramping up production of the new 4680 batteries and the tooling to make the traditional 2170 batteries is “stuck in a port in China,” Musk said. The factory in Grünheide is in a “slightly better position” because the traditional 2170 batteries were installed from the start.
Musk just announced austerity measures that will come with job cuts.
The job cuts will affect around 10 percent of the company’s permanent employees or around 3.5 percent of the global workforce within the next three months, Musk said at the Qatar Economic Forum on Tuesday.
Tesla has pushed ahead with building new plants in various locations around the world in recent years to make distribution in its largest markets cheaper. More factories also give Tesla a higher cap on the number of cars the company can build per year.
In Shanghai, meanwhile, Tesla is struggling with the lockdowns to contain the corona. These are “very, very difficult, to say the least,” Musk said.
“The last two years have been an absolute nightmare of supply chain disruptions, one after the other,” Musk said. “And we’re not off the hook yet. Our biggest concern is how to keep the factories running so we can pay our workers and not go bankrupt.”