[Asia Economy Reporter Jeong Hyunjin] Elon Musk, CEO of Tesla, described the new factories in Berlin, Germany, and Austin, USA, as "massive money furnaces," stating that the company is incurring billions of dollars in losses to increase production volume.
According to Bloomberg and other sources on the 22nd (local time), Tesla posted a video of an interview with CEO Musk conducted on the 31st of last month on the official club website, Tesla Owners Silicon Valley. In the video, Musk reported that huge financial losses are occurring at the new factories, saying, "It sounds like money is burning fiercely like a roaring fire."
Musk said Tesla is struggling to quickly produce the Model Y sport utility vehicle (SUV) equipped with the new 4680 cells and structurally integrated battery packs at the Austin factory. To meet demand, they tried to use the previously installed 2170 cells, but the equipment is in China, which was under COVID-19 lockdown measures, so they have been unable to bring it over.
Regarding China’s COVID-19 lockdown measures, he said, "(The situation) was very, very difficult," explaining that not only the Shanghai factory was affected, but some processes carried out in China also impacted production volumes at the California factory. Musk emphasized, "The past two years have been a complete nightmare of supply chain disruptions, and we have not yet escaped from it."
At this occasion, Musk mentioned that he was thinking about "how to pay employees without going bankrupt while keeping the factories running." Foreign media noted that this statement was made on the 31st of last month, and since he recently mentioned workforce reductions, it is believed that this mindset influenced the decision to cut staff.
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