Tesla CEO claims electric-car factories are ‘gigantic money furnaces’

The worlds’s richest person has made an unusual claim regarding two new factories that are reportedly losing his electric car company Tesla billions of dollars.

Billionaire Elon Musk has revealed his electric-car factories in Berlin and Texas are “losing billions of dollars” due to supply disruptions in China and battery shortages.

Musk, the CEO of Tesla and SpaceX, called the factories “gigantic money furnaces” as Covid-19 lockdowns in China made it difficult for manufacturers to operate at capacity.

“Both Berlin and Austin factories are gigantic money furnaces right now. It’s really like a giant roaring sound, which is the sound of money on fire,” Mr Musk said in an interview with an official recognised fan club called Tesla Owners Silicon Valley.

Musk claimed his Berlin and Texas are “losing billions of dollars”. Picture: Odd Andersen/AFP

The Texas Gigafactor factory that opened in April, has only produced a “tiny” amount of cars as the model’s new battery and tools were “stuck in port in China, with no one to actually move it.”

The Berlin factory that opened in March also faced similar obstacles but was reportedly “in a slightly better position” as the plant relied on 2170 battery cells, instead of 4680 batteries.

“This is all going to get fixed real fast but it requires a lot of attention,” Mr Musk said.

The Covid shutdowns in Shanghai, China were “very, very difficult”, affecting not only the Shanghai factory but also the California plant which relies on vehicle parts made in China.

“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.

The Tesla CEO said the issues are going to get “fixed real fast”. Picture: Scott Olson/Getty Images/AFP

The comments come after Musk announced that a 10 per cent cut in salaried staff at Tesla will be rolled out over a three-month period after expressing concerns over a potential recession in the United States.

“Tesla will be reducing salaried headcount by 10 per cent as we have become overstaffed in many areas,” Musk wrote in a note to employees, which was obtained by CNBC.

“Note this does not apply to anyone actually building cars, battery packs or installing solar. Hourly headcount will increase.”