Tesla's new factories in Texas, United States and Berlin, Germany turned out to be losing billions of dollars due to battery shortages and problems in China.
This is acknowledged by Tesla CEO Elon Musk in an interview. According to him, the two Tesla factories are very big money-burning machines for now.
"Tesla factories in Berlin and Austin are the giant money-burning machines right now. Okay? This plant is really like a booming sound, which is the sound of money burning," Musk explained in an interview with Tesla Owners of Silicon Valley, an auto club, in Austin, Texas.
According to Musk, Tesla's Austin factory has only been able to produce cars in small numbers due to the difficulty of ramp-up because the new 4680 batteries and the equipment to make the 2170 batteries got stuck at ports in China.
"This will all be fixed quickly, but it requires a lot of attention," Musk added.
Meanwhile, the factory in Berlin, according to Musk, is a bit better off, because it has started producing its own 2170 batteries.
The root of the problem lies in the various lockdowns implemented by the Chinese government, including in Shanghai, which Musk says is really making things difficult for Tesla. The lockdown has an impact on car production, not only at the Tesla factory in Shanghai, but also at the Tesla factory in California.
This is because Tesla's California factory also uses a number of components made in China.
Tesla plans to stop the majority of its production in Shanghai in the first two weeks of July. The goal is to update the factory to boost production.
"The past two years have been a real nightmare in terms of supply chain disruptions, one thing or another, and we haven't really recovered from those problems."
Musk was also confused about how to keep Tesla's factories operating so that they could continue to pay their employees, and so that Tesla did not go bankrupt.
In early June Musk admitted to having a bad feeling about the state of the economy, and he thought Tesla needed to reduce its workforce by 10%, as well as stop hiring new employees around the world.
Then earlier this week Musk also decided to cut the salaries of Tesla employees by 10%, which will be carried out in stages over the next three months.