Elon Musk says Tesla factories are ‘money furnaces’ losing billions of dollars

‘It’s really like a giant roaring sound, which is the sound of money on fire,’ Mr Musk said

(AFP via Getty Images)

Elon Musk has said that Tesla factories are losing billions of dollars in Berlin and Austin due to the supply issues in China.

"Both Berlin and Austin factories are gigantic money furnaces right now. It’s really like a giant roaring sound, which is the sound of money on fire," said Mr Musk in an interview with the Tesla Owners of Silicon Valley.

The two factories are “losing billions of dollars right now. There’s a ton of expense and hardly any output”.

Tesla calls its production hubs ‘Gigafactories’, but the massive manufacturing sites have had difficulty increasing production. Mr Musk said that the site in Austin is producing a “tiny” number of cars because of difficulties moving batteries from a Chinese port.

"This is all going to get fixed real fast but it requires a lot of attention," Mr Musk said.

In a leaked memo earlier this month, Mr Musk had said the electric car company had a “very tough quarter, primarily due to supply chain and production challenges in China”.

According to reports, Tesla has been isolating thousands of workers in former factories and a military camp in China in order to keep them working.

Workers are quarantined for between two to three days to meet government requirements before they can interact with external employees. The campsite is reportedly fitted with mobile toilets and showers – shuttled between the accommodation and their work site by bus.

Employees in the first shift are reportedly sleeping on the floor of the factory. They must work 12-hour shifts, six days a week, to bring production back up to speed. They have been reportedly separated from their families and the outside world in general. Tesla did not respond to The Independent’s numerous requests for comment.

In an attempt to increase production, Mr Musk told  all employees that they risk being fired if they do not return to the office and stop working remotely.

“Anyone who wishes to do remote work must be in the office for a minimum (and I mean *minimum*) of 40 hours per week or depart Tesla,” he wrote. “This is less than we ask of factory workers.”

However, Mr Musk has also made massive layoffs. Over 500 employees in Nevada were terminated in a move that workers allege breaches federal law, Reuters reports.

The employees are seeking class action status for all former Tesla staff. "Tesla has simply notified the employees that their terminations would be effective immediately," the complaint said, violating a 60-day notice period under the Worker Adjustment and Retraining Notification Act, the lawsuit alleges.

Tesla did not provide comment to Reuters but in a talk at the Qatar Economic Forum Mr Musk said the lawsuit was “trivial” and that people should “not read too much into a pre-emptive lawsuit that has no standing”.

He continued: "It seems like anything related to Tesla gets a lot of clicks, whether it is trivial or significant. I would put that lawsuit you’re referring to in the trivial category."

Shannon Liss-Riordan, an attorney representing the workers, told Reuters that “While two months’ pay certainly doesn’t matter to [Mr Musk], it matters a lot to the employees who made his company what it is”, and raised concerns that the richest man in the world would allegedly violate labour law so blatantly.