The multi-billionaire also called the factories in Berlin and Austin, Texas, “giant furnaces of money.” Covid-19 lockdowns in China this year, including in Shanghai, where Tesla has a huge factory, have made it increasingly difficult for manufacturers to operate. In recent weeks, Musk has been warning of job cuts at the company.
“The factories in Berlin and Austin are giant money furnaces right now. It’s really like a giant roar, which is the sound of money on fire,” said Musk, who is the electric vehicle maker’s chief executive.
Factories are “losing billions of dollars right now. There’s a ton of expense and almost no production,” he added in an interview with Tesla owners of Silicon Valley, a club recognized by the company.
Musk said the so-called gigafactories have been struggling to ramp up production since they opened earlier this year. Tesla’s Austin site currently produces a “small” number of cars, in part because some of its battery components were “stuck” in a Chinese port “with no one to move them,” he said.
“This is all going to be fixed very quickly, but it requires a lot of attention,” Musk added. The interview was recorded late last month, but that part of the conversation was not posted until Wednesday. Authorities in China locked down several of its cities earlier this year in response to a spike in Covid-19 infections.
Tough restrictions were placed on the movement of people and materials, including in the financial, manufacturing and transportation hub of Shanghai. Musk said the Shanghai shutdown was “very, very difficult” for Tesla, which reportedly halted most of its production at its “gigafactory” in the city for weeks. The site will be closed again for two weeks next month for modernization work, according to the Reuters news agency, which cited an internal memo.
This is aimed at increasing production at the site, bringing it closer to the company’s goal of producing 22,000 cars a week, according to the report. Last week, the company raised the price of its entire U.S. car lineup by nearly 5% as the cost of raw materials, including aluminum and lithium, soared.
This week, Musk said Tesla was planning to lay off 3.5% of its global workforce after previously saying he had “super bad feelings” about the economy. Meanwhile, German automaker BMW said on Thursday it had formally started production at its new $2.2bn (£1.8bn) facility in the northeast China city of Shenyang. BMW said the factory, which is the third in China, will increase its annual production in the country from 700,000 to 830,000.
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