Elon Musk hit by Tesla’s supply chain crisis


The impact of supply chain issues in China on Tesla’s new battery factories in the United States and Germany means they are losing billions of dollars, according to the company’s multi-billionaire founder.

Elon Musk said in an interview that “It’s really like a giant roaring sound, which is the sound of burning money.” Speaking to Tesla Owners of Silicon Valley, a club for owners of the company’s signature electric cars, Musk added, “The factories in Berlin and Austin are gigantic money ovens right now.”

The contractor blamed Covid-related shutdowns in China, pointing in particular to the Shanghai freight hub, which he said was “very, very difficult” for Tesla, limiting production at so-called gigafactories with components blocked at the port. According to press reports, the company plans to use the downtime to update its facilities to move closer to its goal of producing around 22,000 cars per week.

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Tesla this week warned of plans to lay off 3.5% of its global workforce after Musk separately said he had a “super bad feeling” about the economy. He called supply constraints the biggest threat to the company’s growth.

“The biggest part of our concern is how do we keep the factories going so we can pay people and not go bankrupt?” he said.

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Musk said he expects the issues at the Austin factory to be ‘resolved very quickly’ but warned the process ‘requires a lot of attention and will take ‘more effort’ to bring this plant to high volume production than it took to build it. in the first place. He said the number of cars he was currently producing was “tiny”.

The Berlin factory’s struggles weren’t as severe, with Musk saying it was in a “slightly better position”. The German factory uses a more conventional battery, the “2170”, while the Austin factory used the more modern “4680” model, which is more prone to supply chain issues.

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Musk, one of the richest men in the world, is no stranger to controversy or current affairs. Its $44 billion Twitter offering is caught in lags related to the number of active users on the social networking site. There have also been doubts over how he will finance the bid.

The entrepreneur said in February 2021 that Tesla would accept Bitcoin as payment for its cars, before withdrawing the policy in May.



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