On June 22, in an interview given at the end of May to a Tesla car owners club, Elon Musk said that the factories in Germany and Texas are ” gigantic money pits “. The Berlin factory started production last March after falling behind schedule. In Austin, the gigafactory was initially intended to strengthen car production capabilities in the United States. However, a few weeks after their opening, they are both severely handicapped by supply problems.
A battery supply problem
In response to the global economic situation, the president of Tesla announced in early June that he wanted to reduce the workforce of his company by 10%. A project that seems to correspond to the difficulties encountered by factories in Texas and Germany. Bad news coming straight from Elon Musk, stating at the end of May that ” Berlin and Austin are losing billions of dollars right now, because there’s a ton of spending and almost no return “.
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A situation caused by the financial difficulties encountered by Tesla and which have direct effects on its factories. Among them, the costs of logistics and suppliers which are higher due to economic inflation. Health restrictions in China also impacted the company with the temporary closure of Tesla’s Shanghai factory in April. A real blow: it is the gigafactory producing the largest volume of cars in the company.
These complications, which have the effect of exposing the Berlin and Austin factories to a problem with the supply of batteries to produce the Tesla Model Y there. Tesla depends above all on small batteries manufactured by companies like Panasonic, specifies the Wall Street Journal.
To reduce costs and minimize these supply problems, the manufacturer wants to manufacture more batteries in-house. This battery supply chain transition period coincides with the start of production at both plants. They therefore find it difficult to supply themselves with batteries to produce enough vehicles and must therefore slow down the pace.
Tesla has already started layoffs
The CEO wondered in May about the strategy to adopt: Our major concern is how do we keep the factories running so they don’t go bankrupt and we can pay the people “. Since the interview, radical decisions have been made by the manufacturer. 500 employees of the Nevada factory, which manufactures batteries, were laid off in early June. Far from the 10% announced, Tesla risks continuing the layoffs.
FactSet analysts expect Tesla to deliver 273,000 vehicles in the second half of 2022, down from 310,000 in the first quarter. This would be the first quarter-to-quarter delivery drop in the past two years. Tesla, which intended to produce its famous Cybertruck in the Texas factory by 2023, could once again postpone its plans.