Tesla’s Factories In Austin And Berlin Are Losing Billions!

Despite being profitable last year, Tesla is once again losing money, particularly in its "Gigafactories" in Austin and Berlin.

On his Twitter, Musk wrote, “How do we keep the factories operating so we can pay people and not go bankrupt?”

“Both Berlin and Austin factories are gigantic money furnaces right now,” He added. “There should be like a giant roaring sound, which is the sound of money on fire.”

The COVID-19 shutdowns in Shanghai were a nightmare for Tesla, affecting overall car production at both its Shanghai and California plants. 

Notably, the Fremont plant uses Chinese-made parts, allowing for cost savings while maintaining cutting-edge infrastructure for EV production. This, however, has hampered production, causing more harm than good this year.

Even worse, a lack of batteries and essential tools stranded in Chinese ports appears to be Tesla's downfall. You may be wondering why these batteries are not manufactured elsewhere?

Apparently, Tesla is unable to make enough of the new 4680 batteries, while the tooling required for the older 2170s is stuck in China.

The increased demand for EVs is causing a shortage of raw materials, especially since other manufacturers are also producing their own EVs. 

Musk appeared deeply concerned in the video interview with Tesla Owners of Silicon Valley because the supply shortage meant a significant reduction in the rate of EV production globally.

Furthermore, he had discussed the possibility of a Tesla order freeze near the end of the year. Meanwhile, the long-awaited Tesla Cybertruck has been sold out until 2027, while the "Model 2" hatchback and Roadster releases have been postponed.

Elon Musk already had a "super bad feeling" about the economy and wasted no time in retaliating. To begin, he confirmed job cuts of up to 3.5 percent and halted all hiring globally. 

He also confirmed a 10% pay cut within three months, as well as a shift in the payment system for some employees from fixed salary income to hourly rates. 

Simultaneously, Tesla plans to halt production at its Shanghai plant for nearly 15 days in order to upgrade the facility and increase output, according to an internal memo.