Elon Musk: Berlin, Austin Gigafactories Are ‘Gigantic Money Furnaces’

Tesla isn’t immune to a combination of the coronavirus pandemic and China’s zero-COVID policy, in fact it’s losing billion of dollars.

As Reuters reports(Opens in a new window), CEO Elon Musk recently gave an interview with Tesla Owners of Silicon Valley, during which he made it clear how bad the situation is for both the Berlin and Austin gigafactories right now.

For Austin, it’s a combination of not being able to produce high quantities of the new 4680 batteries and an inability to create the older 2170 batteries because the tooling is stuck in a port in China. Musk said it’s going to more effort to get the Austin factory to high-level production than it did to build.

Berlin is suffering a similar situation, but can at least manufacture 2170 batteries that are used in some of the electric vehicles it produces. However, for both gigafactories, Musk describes the situation as like running two “gigantic money furnaces,” and “there’s a giant roaring sound which is the sound of money on fire.” Both Austin and Berlin are “losing billions of dollars right now” due to the high level of expense coupled with tiny output.

While Musk believes the situation will be fixed very quickly, it sounds like Shanghai is the biggest concern. The shutdowns due to COVID-19 outbreaks stopped production at the Shanghai gigafactory, but the California plant relies on parts shipped from China, so it had a much wider impact for Tesla.

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With the Chinese government’s continued focus on zero-COVID, there’s a chance of more unexpected shutdowns in the near future. Tesla is planning a two-week shutdown of the Shanghai gigafactory in early July for upgrades, which should boost production.

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