Tesla’s CEO Elon Musk motioned the possibility of bankruptcy because Tesla faces billions of dollars in losses from its new plants, supply chain problems and Covid lockdowns.
“The past two years have been an absolute nightmare of supply chain interruptions, one thing after another,” Musk said in an interview with a Tesla owners group. “We’re not out of it yet. That’s overwhelmingly our concern is how do we keep the factories operating so we can pay people and not go bankrupt.
Musk engaged in hyperbole elsewhere in the interview, and he may have been doing so when mentioning the risk of bankruptcy. For example, he said that automakers in general “desperately want to go bankrupt,” which falls in the category of colorful language rather than strict financial analysis.
Tesla’s factory in Shanghai was shut for weeks due to Covid related lockdowns in the city. And Musk disclosed in the interview that the two factories Tesla opened in the quarter, in
Germany and Texas, are costing the company billions of dollars in losses because supply chain issues have left them with “puny” output so far.
“This is all going to get fixed real fast,” he said in comments recorded on May 31, but not released until late Wednesday. “Both Berlin and Austin factories are gigantic money furnaces right now. There’s a giant roaring sound which is the sound of money on fire. Bigger than a dumpster [fire]. A dumpster is too small. Berlin and Austin are losing billions of dollars right now. There’s a ton of expense and hardly any output”.
Source: Business Standard
