Musk: New Tesla factories are losing billions

Elon Musk

Tesla CEO Elon Musk speaks before the unveiling of the Model Y at Tesla’s California design studio. Photo: Jae C. Hong/AP/dpa

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No sooner had the new factories in Grünheide near Berlin and in Austin, Texas, been officially opened than production came to a standstill – supply chain problems. For Elon Musk it is an “absolute nightmare”.

According to the CEO, Tesla’s new electric car factories in Grünheide near Berlin and Austin in the US state of Texas are losing Elon Musk currently “billions of dollars”.

Musk described the locations in a video interview published on Wednesday as “giant money incinerators”. In the conversation with the Tesla Owners of Silicon Valley fan club, he mentioned the past two years with a view to the supply chain issues an “absolute nightmare” for the auto industry. The Tesla boss warned: “We’re not over it yet”.

Now it is a matter of keeping the company running so that the employees continue to be paid and the group does not go bankrupt. While high start-up costs and losses at new factories like Grünheide and Austin are relatively normal in the start-up phase when ramping up production, Tesla also faced challenges with its Shanghai plant. “The Covid shutdowns in China have been very, very difficult to say the least,” Musk said. The interview was conducted on May 31, but the part with the most recent statements has only now been broadcast on the Internet.

Musk had recently repeatedly warned of an economic downturn and announced job cuts at Tesla. The electric car maker will cut 3 to 3.5 percent of its jobs in the coming months, Musk made clear on Tuesday after conflicting reports. Around every tenth job among employees is to be lost, while the number of factory workers will increase in the long term. At the beginning of the year, Tesla had almost 100,000 employees.