Tesla CEO Elon Musk said on Wednesday (22nd) that two new super factories in Texas, the United States and Berlin, Germany are facing difficulties in increasing production due to the impact of the epidemic in China and port transportation bottlenecks on battery supply, which have now burned billions of dollars. .
In an interview with the Tesla Owners of Silicon Valley, Musk revealed that electric vehicle battery shortages and supply chain hurdles are costing Tesla. He said: “The Berlin Gigafactory and the Texas Gigafactory are now super money-burning furnaces. It’s really like a huge roar, and they’re all money-burning sounds.”
Musk further explained that the production capacity of Tesla’s Texas plant cannot be increased because it relies on China to supply new 4680 batteries to reach the scheduled production capacity. However, the closure of Shanghai has hit the relevant supply chain, the battery supply is limited, and many auto parts and tools are stuck in China. The port, and the situation at the Berlin factory is not much better.
But Musk said: “It’s all going to work out very quickly, it’s going to take a lot more energy to put it into production than it was when it was built in the first place, and it’s going to take a lot of attention.”
Musk said that supply chain bottlenecks have been Tesla’s biggest challenge over the past two years, and one of his biggest concerns now is how to keep Tesla’s factories operating without going bankrupt.
Tesla is ramping up to expand capacity and cut spending. Musk recently decided to cut costs by laying off 10% of his salaried workers over the next three months, or about 3.5% of the workforce. According to an internal memo, Tesla’s Shanghai Gigafactory will cut production for two weeks in July, upgrade factory equipment, and aim to increase production by the end of July.
Tesla (TSLA-US) fell 0.40% to $708.26 a share on Wednesday. Morgan Stanley on Wednesday lowered its price target on Tesla to $1,200 per share from $1,300 previously, maintaining an “overweight” rating.