Musk: Austin, Berlin Tesla factories ‘losing billions of dollars’

Video from Tesla Owners Silicon Valley

AUSTIN (KXAN) — Tesla CEO Elon Musk said the company’s new factories in Berlin and Austin are burning through “billions of dollars” because of battery supply issues.

Musk sat down for an interview with Tesla Owners Silicon Valley at Giga Texas, where he said, “both Berlin and Austin factories are gigantic money furnaces right now. Okay. It’s really like a giant roaring sound, which is the sound of money on fire.”

The CEO explained this is due to production challenges with Tesla’s new 4680 battery cells and the equipment for the company’s typical 2170 batteries stuck in China’s ports.

While Musk said the Berlin factory is in a “slightly better position” than Giga Texas since it began production with the 2170 batteries, he’s optimistic the issues will resolve quickly.

“This is all going to get fixed real fast, but it requires a lot of attention,” Musk said in the interview released on YouTube Wednesday.

The CEO said it will take more effort to get the Austin factory to proper production levels than it took to build the facility in the first place.

“Berlin and Austin are losing billions of dollars right now. There’s a ton of expenses and hardly any output. So getting Berlin and Austin functional and getting Shanghai back in the saddle, fully, are overwhelmingly our concerns,” Musk continued.


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According to Electrek, Tesla announced its 4680 battery cell in Sept. 2020, saying it puts out six times the power of past battery cells the company has used. The news outlet reported this month Tesla had to create new processes to manufacture the cell and ways to implement those practices at its Austin, Berlin and Shanghai factories.

The scarcity of lithium on the market is also impacting electric vehicle production, CEO of EnergyX Teague Egan told KXAN in an April interview. He said there are different types of batteries for EVs, but they all require lithium.

“That’s kind of what we’re seeing both with Tesla’s price hikes and the delays on Cybertruck, the delays on GMs and Fords and everybody’s push to market,” Egan said in April.


How a shortage in Lithium in the market is impacting Tesla & other EVs

Musk tweeted in April that Tesla might have to dabble in mining and refining lithium itself.

“Price of lithium has gone to insane levels! Tesla might actually have to get into the mining & refining directly at scale, unless costs improve,” Musk wrote. “There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refinement is slow.”

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