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Tesla plants gigantic money furnaces: CEO

Elon Musk says electric car maker’s two newest factories are losing billions of dollars

24 Jun 2022

TESLA CEO Elon Musk says his firm’s two newest production facilities – in Berlin and Austin – are “losing billions of dollars” as they struggle to keep pace with production.


Mr Musk said a shortage of batteries and Chinese port delays were to blame for the issue, and that the plants are producing only a small portion of the cars required to prevent factory closures and, ultimately, bankruptcy.


“Both Berlin and Austin factories are gigantic money furnaces right now,” Mr Musk saud in an interview with Tesla Owners Silicon Valley recently. “It’s really like a giant, roaring sound, which is the sound of money on fire.”


Tesla commenced production at its Austin and Berlin facilities earlier this year and the two plants’ overall production mass was described as “critical” to the growth ambitions of the electric car maker.


Mr Musk said Tesla’s Austin plant produced only a “tiny” number of cars because of issues surrounding production of its new 4680-series batteries. The tooling required to produce more of its conventional 2170-series batteries were “stuck in port in China.”  


Mr Musk explained that the COVID-19 related shutdowns that had impacted Shanghai had made things “very, very difficult” and that the flow-on effect of the situation affected vehicle production not only in the Chinese city, but also in California, a facility which uses many of the same vehicle parts made in China.


“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 cautioned. “How do we keep the factories operating so we can pay people and not go bankrupt?”


Earlier this week, Mr Musk said that 10 per cent of all salaried staff at Tesla would be cut from the company’s books “within the next three months”. He also said that a recession in the United States was “more likely than not”.


In his interview with Tesla Owners Silicon Valley, Mr Musk said he expected Telsa would commence production of its long awaited Cybertruck in mid-2023. Originally slated to enter production in 2019, the Cybertruck has been delayed several times during the COVID-19 pandemic as supply and labour shortages took their toll.


As reported by GoAuto, Tesla last month halted orders for its futuristic pick-up truck outside of North America saying demand for the model exceeded production by a “ridiculous degree”. The already-delayed Cybertruck most recently fell victim to changes in “features and function” related to Tesla’s ongoing supply issues. 


The company has also withdrawn any reference to the model’s delivery date from its website, now stating that customers “will be able to complete your configuration as production nears”.


Tesla plans to produce the Cybertruck at its new Texan factory, alongside the Model Y, but has been beaten to the punch by rivals such as Rivian, Ford and GM.


The Cybertruck joins Tesla’s second-gen Roadster in facing ongoing production delays. The tri-motor open-topped sportscar (first revealed in 2017), was earmarked for a 2022 production slot, but is now expected to enter production only next year.


Although it’s running behind schedule, the Roadster will not be running behind many rivals in terms of firepower. Mr Musk claims the new model will develop more than 10,000Nm of torque resulting in a claimed 0-100km/h sprint time of just 2.1 seconds.


Using a similar tri-motor drive system as the recently revealed Model S Plaid and Model X Plaid, the Roadster’s peak power output is expected to rise above 750kW,  while, according to Mr Musk, its top speed is expected to be north of 400km/h.


Other claimed performance stats include a 4.2-second dash from 0-160km/h and an 8.8-second quarter mile time. All this firepower will come from a 200kWh battery pack that will offer close to 1000km of range from a fully-charged state, Tesla claims.

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