New Tesla factories losing billions of dollars, Musk says

Image source, Reuters

Due to battery shortages and supply disruptions in China, the new factories in Germany and the US are losing billions of dollars.

The plants in Berlin and Austin were referred to as "gigantic money furnaces".

It has become more difficult for manufacturers to operate in China due to Covid-19 lock-ups.

Mr Musk has warned of job cuts at the company.

Berlin and Austin are huge money furnace. Mr Musk said that the sound of money on fire was like a giant roaring sound.

Billions of dollars are being lost by the plants. He said in an interview that there was a lot of expense and barely any output.

The gigafactories have not been able to increase production since they were opened.

He said that some of the components for its batteries were stuck at a Chinese port with no one to move them.

"This is going to be fixed quickly, but it requires a lot of attention," Mr Musk said.

In response to a surge in Covid-19 infections, authorities in China locked down many of its cities.

There were strict restrictions on the movement of people and materials in the financial, manufacturing and shipping hub ofShanghai.

Mr Musk said that it was difficult for the company to stop production in the city.

According to an internal memo, the site will be mostly shut down for two weeks next month for upgrade works.

The company's goal is to produce 22,000 cars a week, and this will bring it closer to that.

The company did not reply to the request for comment.

After saying that he had a "super bad feeling" about the economy, Mr Musk said that his company would be cutting 3.5% of its workforce.

BMW said on Thursday that it had started production at its new facility in China.

BMW said it will increase its annual output in China from 770,000 to 830,000.

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