Tesla is trying not to go bankrupt because of new plants

Tesla is trying not to go bankrupt because of new plants 1

Tesla Inc’s new car plants in Texas and Berlin are “losing billions of dollars” because they are trying to increase production due to a shortage of batteries and problems with ports in China, CEO Elon Musk said in an interview published on Wednesday.

“The factories in Berlin and Austin are now giant furnaces for money,” Musk said in an interview with Tesla Owners of Silicon Valley, officially recognized by the Tesla club in Austin, Texas, on May 31.

Musk said the Tesla plant in Texas produces a “tiny” number of cars due to problems with increasing production of its new “4680” batteries, as well as because parts for the production of its conventional 2170 batteries are “stuck in a port in China.” Musk noted that the issue will be solved very soon and requires attention.

He said his Berlin plant is in a “slightly better position” because he started by using traditional 2170 batteries for cars built there.

At the same time, the stops in Shanghai related to COVID-19 “were very, very difficult.” According to him, the closure affected the production of cars not only at the Tesla plant in Shanghai but also at its plant in California, where some parts of cars made in China are used.

Tesla plans to suspend most of the production at its Shanghai plant in the first two weeks of July to work on upgrading the site to increase productivity, according to an internal memo seen by Reuters.