Tesla Hemorrhages ‘Billions Of Dollars’ As Elon Musk Woes Continue

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Tesla CEO Elon Musk says the electric car company is losing “billions of dollars right now” through factories in Berlin, Germany, and Austin, Texas, where there have been struggles to get production up to a sufficient level to offset major costs.

“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,” Musk said in an interview. “So that’s overwhelmingly our concern is, how do we keep the factories operating so we can pay people and not go bankrupt? And then everything else is like, nice to have. Even recently, the Covid shutdowns in China were very, very difficult.”

Subsequently, he added more specifics. “Both Berlin and Austin factories are gigantic money furnaces right now. Okay?” the CEO explained. “It’s really like a giant roaring sound, which is the sound of money on fire… Berlin and Austin are losing billions of dollars right now because there’s a ton of expense and hardly any output. So getting Berlin and Austin functional and getting Shanghai back in the saddle fully are overwhelmingly our concerns. Everything else is a very small thing basically.” The interview was published by Tesla Owners of Silicon Valley, which is an official Tesla-recognized club.

“Musk said Tesla’s Texas factory produces a “tiny” number of cars because of challenges in boosting production of its new “4680” batteries and as tools to make its conventional 2170 batteries are “stuck in port in China,”” as summarized by Reuters. Tesla has faced recent issues including dramatic declines in stock price. As of Thursday afternoon, the company’s share price was around 42 percent lower than it was when the year began, having lost what’s approaching half its early January value. The Tesla factories in Germany and Texas are new; presumably, failing to ramp up production to the needed levels there could have substantial impacts on the company’s business. And at Tesla, there’s a 10 percent reduction in salaried staff planned for this year, with the company moving to a greater reliance on people who are paid by the hour, according to Musk.

Tesla is also facing federal scrutiny. The company’s been placed under an expanded investigation by the federal entity known as the National Highway Traffic Safety Administration (NHTSA) over autopilot features in company-produced cars. As explained by The Verge, the federal investigation into Tesla is now formally an “Engineering Analysis,” which is the final investigative stage before a potential recall. And it would seem as though that potential recall could affect substantial swathes of the company’s output — 830,000 vehicles (with model years from 2014 to 2021) sold across the U.S. are now covered by the probe. Ongoing federal investigations into Tesla’s autopilot system will “explore the degree to which Autopilot and associated Tesla systems may exacerbate human factors or behavioral safety risks by undermining the effectiveness of the driver’s supervision,” according to the investigating federal agency.