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Tesla Inc.’s two newest car factories have been losing billions of dollars as supply-chain disruptions and battery-cell manufacturing challenges limit the company’s ability to increase production, Elon Musk said in a recent interview.
The company’s plants in Germany and Texas, which opened earlier this year, are “gigantic money furnaces,” the Tesla chief executive said in a May 30 interview with a Tesla owners’ club that was released Wednesday.
“Overwhelmingly our concern is, how do we keep the factories operating so we can pay people and not go bankrupt?” Musk said in the interview. He added that he expected Tesla to resolve these problems quickly.
In the weeks since the interview was recorded, Tesla has begun layoffs that Musk indicated could touch 10% of the company’s salaried workforce.
Musk didn’t immediately respond to a request for comment. Tesla’s stock
TSLA,
closed down less than 1% on Wednesday, but has tumbled by around a third in 2022.
Car making is a notoriously cash-hungry business, and investors for years worried that Tesla’s war chest wouldn’t be sufficient. Such concerns had eased, however, as the company paid down debt, raised money and reported a string of quarterly profits that helped transform it into the most valuable auto maker in the world. As of the first quarter, Tesla was sitting on roughly $17.5 billion in cash.
An expanded version of this report appears on WSJ.com.
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