Elon Musk says Tesla's factories in Austin, Berlin are losing billons of dollars

Tesla's manufacturing facilities in Austin and Berlin are losing billions of dollars, according to CEO Elon Musk, who says supply chain issues and other problems are hampering the Austin-based company's plans to increase production.

In an interview filmed at the Austin facility and posted online this week, Musk told members of the Tesla Owners Silicon Valley Club that the two factories, which opened this year, "are gigantic money furnaces right now.”

“There should be like a giant roaring sound, which is the sound of money on fire,” Musk said.

More: Elon Musk says Austin-based Tesla battling through 'tough quarter'

The Austin factory "is losing insane money right now," Musk said.

"We should be outputting a lot more cars from this factory right now, versus a very puny amount of cars," he said, before detailing a number of supply chain issues the company is facing, along wth the shutdown of its factory in Shanghai, China, due to the coronavirus pandemic. “I’m not sure everyone knows just how serious the COVID shutdowns were in China,” Musk said.

"This is all going to get fixed fast, but it requires a lot of attention. And it will take more effort to get this factory (in Austin) to a high level of production than it took build it in the first place," Musk said in the interview.

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The plans for the Tesla facility in Austin

Tesla moved its headquarters to Central Texas last year to the site of its $1.1 billion manufacturing facility, which is considered the company's most advanced to date.

The facility, which was first announced in July 2020 and had a grand opening in April of this year, is expected to play a key role for the company in increasing its vehicle production. Tesla started to deliver Model Y vehicles from the facility in April, and Musk has said Tesla aims to make as many as half a million vehicles in Austin next year, making it among the highest-volume car factories in the country,

Musk has said the facility is expected to hire more than 10,000 people through the end of this year. In addition to Model Y SUVs, the facility is expected to produce the Cybertruck, Model 3 and Semi vehicles, as well as vehicle batteries.

Less than two weeks ago, Musk sent Tesla employees an email over saying the company had struggled during the second quarter and encouraged employees to finish the quarter strong.

“This has been a very tough quarter, primarily due to supply chain and production challenges in China. So we need to rally hard to recover," the email said, according to Bloomberg news service.

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That followed a pair of emails Musk sent earlier in the month, calling for a pause on hiring and job cuts.

Reuters first reported that Musk emailed executives that he had a "super bad feeling" about the economy and to pause all hiring worldwide, and CNBC later reported a separate email that indicated the company was considering cutting 10% of its salaried workers. Musk later tweeted that the total headcount for Tesla is still expected to increase. Tesla estimated that it employed about 100,000 people as of the end of 2021.

Musk, who moved to Texas in 2020, has been expanding his other companies in Central Texas in recent years. Musk moved the headquarters of his tunneling and infrastructure firm, the Boring Company, to Central Texas, and relocated his private foundation to Austin. His aerospace company SpaceX and his neurotechnology company Neuralink have also mentioned an Austin presence in job postings.

Additional material from American-Statesman wire services.

This article originally appeared on Austin American-Statesman: Elon Musk: Tesla's factories in Austin, Berlin are losing billons