Tesla CEO Elon Musk dubs new electric car factories ‘gigantic money furnaces’

Tesla CEO Elon Musk revealed his new electric car factories are “losing billions of dollars” amid global supply chain disruptions that have hampered their ability to increase production.

“Both Berlin and Austin factories are gigantic money furnaces right now,” Musk said in an interview with Tesla Owners Silicon Valley, which was published on YouTube Wednesday and recorded on May 30.

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

Both locations opened earlier this year with massive events to celebrate — at the April launch of the Gigafactory in Austin, Musk declared it “a new phase of Tesla’s future.” It was built to produce Tesla’s Model Y and will eventually produce the Cybertruck, an electric pickup truck with recently finalized designs.

But now, the pair of new factories are “losing insane money” because they are only able to put out a “puny” number of vehicles. He blamed battery shortages and a snag in the global supply chain, which have left important components and tools necessary for production “stuck” at a Chinese port “with no one to actually move it.”

“Just been trying to keep the factories operating the last couple years has been a very difficult thing, like supply chain interruptions have been severe, like extremely severe,” Musk said.

“The past two years have been an absolute nightmare of supply chain disruptions, one thing after another, and we are not out of it yet.”

The world’s richest man also noted that the Tesla factory in Shanghai has faced repeated shutdowns, triggered by waves of COVID-19 and the subsequent restrictions.

Earlier this week, Musk appeared via video link at the Qatar Economic Forum, where he said that, “Tesla is reducing salaried workforce roughly 10% over the next probably three months or so.”

He added: “I guess technically a 10% reduction in the salaried workforce is only roughly a 3% to 3.5% reduction in total headcount.”