Elon Musk Heading For Bankruptcy? Mogul Bares Tesla 'Losing Billions'

Billionaire Elon Musk said in an interview released on Wednesday that the Tesla factories in Germany and Texas are losing “billions of dollars” due to supply-chain disruptions and a battery shortage, as Tesla continues to go through a turbulent year.

Speaking in an interview with the Tesla Owners Silicon Valley group, Musk admits that the output of the Tesla factories has been dramatically slowed down due to a variety of factors and supply-chain issues that they are unable to mitigate at the moment, according to Forbes.

“Both Berlin and Austin factories are gigantic money furnaces right now. It’s like a giant roaring sound, which is the sound of money on fire,” Musk said. “Berlin and Austin are losing billions of dollars right now because there's a ton of expense and hardly any output.”

Musk elaborated that the factory in Texas was experiencing less output than he first expected due to the cells and battery packs being stuck in China, while the Berlin plant appears to be performing at more acceptable levels despite the low output, the Daily Beast reported.

“Overwhelmingly our concern is, how do we keep the factories operating so we can pay people and not go bankrupt?” Musk said in the interview.

Many analysts on Wall Street have been downgrading or reanalyzing Tesla’s stock and output, with some readjusting their observations to match the current state of the company. Morgan Stanley equity analyst Adam Jonas has already trimmed down his output estimates on Tesla from 316,000 to 270,000 in the second quarter.

“We mark to market our 2Q forecasts for lower volume (latest data, China) with most of the shortfall made up for in 2H volume and higher pricing,” he said.

Musk has also found his Tesla factory in China to be underproducing due to public health concerns, and has said that he is looking into ensuring that the factory will return to producing its regular output soon.

“Getting Berlin and Austin functional and getting Shanghai back in the saddle fully are overwhelmingly our concerns. Everything else is a very small thing,” he said.

Tesla stock has fallen over 35% since the start of the quarter, with its stock price dipping to $706 by the end of the trading hours. The company recently announced plans to lay off 10% of its workforce in an attempt to adjust to the year’s challenges.