Elon Musk says Tesla's new factories are 'gigantic money furnaces'

According to Elon Musk, Tesla's new factories in Texas and Germany are losing money due to the battery shortage and port issues in China.

In an interview with the officially-recognised club Tesla Owners of Silicon Valley, Elon Musk said the new gigafactories in Austin, Texas, and Berlin, Germany, were costing the electric vehicle company "billions of dollars". The factory in Austin opened on April 7, 2022, and the factory in Berlin opened on March 22, 2022.

"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," said Musk in the interview, as reported by Reuters.

The problem seems to lie with battery shortages and the port closures in China due to COVID-19 lockdowns. The Texas factory seems to primarily use the new "4680" batteries that are in short supply, while even the vehicles that use the older "2170" batteries are struggling to get a ahold of them due to Chinese port lockdowns.

According to Musk, COVID has been a "nightmare" for Tesla, with supply chain issues disrupting the global creation of parts from China to California. "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.

Additionally, the interview revealed that Musk believed that Tesla was not far away from having to shut down some factories.

According to the billionaire, Tesla's overwhelming concern is how to "keep the factories operating so we can pay people and not go bankrupt"?

Edited by Teja Lele Desai