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Tesla’s new factories are losing billions of dollars By Investing.com

Tesla (NASDAQ:TSLA) CEO Elon Musk said during a recent interview that EV battery shortages and supply chain problems are costing his company billions of dollars.

Musk said Tesla’s new factories are “giant cash furnaces” that are losing billions of dollars due to EV battery shortages and supply chain problems.

He has also complained about supply chain disruptions in the past.

Musk is one of many auto executives who openly admit that such a shortage could hurt the industry even more.

“Both the factories in Berlin and Austin are now giant money ovens,” Musk said on Wednesday.

He pointed out that one of his biggest problems right now is how to keep Tesla factories running without declaring bankruptcy. Tesla recently opened new factories in Texas and Berlin. The company’s largest plant is located in Fremont, California. Tesla also has an active factory in Shanghai.

Musk said last week that he plans to cut Tesla’s workforce by 10%. The decision came after Musk said the US economy was likely entering a recession that could last 18 months.

Musk mentioned that the company’s Texas plant was only able to produce a “minuscule” number of cars and cited production problems with the 4680 battery, as well as delays in ports in China, which affected the supply of basic goods.

Recall that Shanghai recently had a strict quarantine due to COVID-19 against the backdrop of China’s zero-tolerance policy on infection.

Supply chain disruptions remain the biggest problem for the company. At the Qatar Economic Forum, Musk said that “Our constraints are much more related to raw materials and the ability to scale up production. As anyone who has tried to order Tesla cars knows, demand is extremely high and the waiting list is long. But this is not intentional, we are increasing production capacity as quickly as possible.”

Rivian (NASDAQ:RIVN) CEO R.J. Scaringe has voiced the same problem earlier, saying that a shortage of electric vehicle batteries could soon wreak havoc on the auto industry even more than a shortage of computer chips. And Ford (NYSE:F) CEO Jim Farley said last year that the chip shortage was “the biggest supply shock” he’s ever seen.

— Materials from Business Insider were used in the preparation

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