Tesla chief executive Elon Musk has acknowledged that the car manufacturer’s factories in Texas and Berlin are money pits.
While recently speaking with the Tesla Owners Silicon Valley club, the eccentric mogul said that the two factories are “losing billions of dollars.”
“Both Berlin and Austin factories are gigantic money furnaces right now. Okay? It’s really like a giant roaring sound, which is the sound of money on fire,” he said.
Musk added that Tesla’s gigafactory in Texas is currently producing just a “tiny” number of vehicles due to issues the car manufacturer has encountered in boosting production of its 4680 battery cells. He also revealed that many of the tools required to make its 2170 battery cells are stuck in a Chinese port.
“This is all going to get fixed real fast, but it requires a lot of attention, and it will take more effort to get this factory to high-volume production than it took to build it in the first place,” Musk said.
Tesla, like the rest of the car industry, has had to overcome a myriad of supply chain challenges over the past two years and while it hasn’t been hit as hard as some rivals, Musk said that it has been a challenging 24 months.
“The past two years have been an absolute nightmare of supply chain interruptions, one thing after another, and we’re not out of it yet,” he said, Bloomberg reports. “Overwhelmingly our concern is how do we keep the factories operating so we can pay people and not go bankrupt. The COVID shutdowns in China were very, very difficult, to say the least.”
Tesla is looking to slash costs by cutting 10 per cent of its workforce over the coming three months. The car manufacturer will also transition some workers from fixed salary incomes to hourly rates.