Published , by Morgan Shaver
Published , by Morgan Shaver
Elon Musk is back in the news once again, this time in regards to statements made about Tesla’s Berlin and Austin gigafactories. According to Musk, the factories are losing “billions of dollars right now” due to ongoing supply chain issues.
This stems, in part, from the COVID-19 pandemic as a recent resurgence of the virus in China resulted in a two-month lockdown in Shanghai, which is where one of Tesla’s plants is located.
That said, lockdowns aren’t the primary problem as it was reported by Reuters that Tesla plans to suspend most of its Shanghai plant’s production during the first two weeks of July in order to work on upgrades intended to increase the plant’s output.
At present, the Shanghai factory produces around 17,000 Model 3 and Model Y vehicles, with the goal behind increasing output being to bring that number up to 22,000. Ramping up production can be costly, but it sounds like it isn’t as concerningly costly as the situation with Tesla’s Berlin and Austin gigafactories.
In one part of Musk’s statement on the Berlin and Austin factories, he points out as an example that some of the tools needed for manufacturing some of Tesla’s vehicles are currently “stuck in a port in China”.
Not being out of it yet certainly seems to be the case, as Reuters reports that production at Tesla’s Shanghai factory is expect to fall by “over a third this quarter from the first three months of the year” as a result of lockdowns in China causing “deeper disruptions to output than Musk had predicted.”
For more on this, be sure to read through the full report from Reuters and CNBC. And for more on Elon Musk, also check out some of our coverage including Musk confirming upcoming Tesla (TSLA) salaried workforce cuts.