Repeated lockdowns in China this year, especially in Shanghai where Tesla has a huge factory, have hit the automaker’s operations and finances, Reuters and BBC report. This was suggested by Elon Musk, casting doubt on possible job cuts. “The factories in Berlin and Austin are gigantic money furnaces right now. It’s really like a giant roar, with the sound of burning money,” the Tesla CEO said in an interview with Tesla Owners. of Silicon Valley, a company-recognized club, in late May. And to add that these two gigafactory were currently losing “billions of dollars”. “There’s a ton of expense and hardly any production.”
Both factories have reportedly struggled to ramp up production since opening, due to shortages of semiconductors, but also because some of its battery components are “stranded” in a Chinese port “with no one to move them.” “Everything will be resolved very quickly, but it requires a lot of attention,” warned the billionaire.
Indeed, due to an epidemic resumption in certain areas of the country, the Chinese government had ordered the strict confinement of several large cities. Severe restrictions had been imposed on the movement of people and materials, including in the financial, manufacturing and shipping hub of Shanghai. A “very, very difficult” shutdown for Tesla, which was forced to shut down most of its production at its “gigafactory” in the city for weeks. And the site is expected to be largely closed for two weeks next month for upgrade work, according to Reuters, which had access to an internal memo. Objective of this work: to increase the site’s production, to approach the objective of 22,000 cars produced per week.