Musk says new Tesla plants are ‘money furnaces’, losing billions

Musk says new Tesla plants are ‘money furnaces’, losing billions

Tesla has spent the last few years prioritising building new factories in different locations around the world to make it cheaper to distribute cars in its biggest markets. More factories also give Tesla a higher ceiling for how many cars it can build per year.

Tesla’s struggles in getting the Austin and Berlin factories up and running occurred as the automaker was also dealing with COVID-related lockdowns at its Shanghai plant, Mr Musk said. At the time of last month’s interview, Tesla was still trying to recover from a dramatic drop in production brought on by the Chinese government’s restrictions, as well as persistent supply-chain headaches.

“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. Overwhelmingly our concern is how do we keep the factories operating so we can pay people and not go bankrupt,” Mr Musk said. “The Covid shutdowns in China were very, very difficult, to say the least.”

Since the interview, Tesla has more than tripled production at its plant in China.

Morgan Stanley analyst Adam Jonas cited the China disruptions in part as he lowered his price target on the automaker to $US1200 a share from $US1300. He maintained his overweight rating on Tesla. Tesla’s shares closed down less than 1 per cent, to $US708.26, on Wednesday in New York.

Bloomberg

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