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“Factories in Berlin and Austin are furnaces for burning money”

“Both the Berlin and Austin factories are gigantic money-burning furnaces right now. Okay? It really is like a giant roar, which is the sound of money burning.” So graphic has described Elon Musk the situation of the Tesla factories in statements collected by Reuters.

The traffic jam in Chinese portswhich is expected to last until 2023, together with the battery shortageare the main causes pointed to by the company’s executive president.

Congestion in ports and lack of containers: the key to the problem in the supply chain

Puerto

Musk points to Losses of billions of dollars in factories in Texas and Berlin.

Texas is currently manufacturing well below its goals due to problems in driving the development of new 4680 batteriesto which is added that the tools to make conventional 2170 batteries “are stuck in the port of China,” Musk has said.

For its part, the Berlin gigafactorywhich started production three months ago, is in a somewhat better situation due to the use of 2170 batteries. A situation that he assures “will be fixed very quickly”.

However, the controversial billionaire has shown his concern about a situation that has been going on for two years: “How do we keep the factories running so we can pay people and not go bankrupt?”

Covid has caused the activity in the most important ports in the world, such as Shanghai, falls to worrying levels due to the shortage of personnel and the lack of drivers and containers, the price of which has increased significantly.

According to data from IHS Markit, congestion levels at ports in mainland China have increased by 30% to 40% since March. High tariffs on sea routes out of Asia, combined with port delays, incentivize shippers to return with empty containers.

A situation that has affected most car manufacturers, but is expected to improve as the confinements in China are lifted.

In this scenario, Tesla plans to suspend most production at its Shanghai plant in the first two weeks of July to ramp up production, according to an internal memo seen by Reuters.

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I started to play with tech since middle school. Smart phones, laptops and gadgets are all about my life. Besides, I am also a big fan of Star War. May the force be with you!

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