Elon Musk Says Giga Gruenheide and Giga Austin Are Losing Insane Money Right Now

Elon Musk tells the Tesla Owners Silicon Valley that Giga Gruenheide and Giga Austin are money furnaces 10 photos
Photo: Tesla Owners Silicon Valley/YouTube
Elon Musk warns Rivian and Lucid are “tracking toward bankruptcy”Elon Musk warns Rivian and Lucid are “tracking toward bankruptcy”Tesla Giga AustinTesla Giga AustinTesla Giga AustinTesla Giga AustinTesla Giga GruenheideTesla Giga GruenheideTesla Giga Gruenheide
First, Tesla stopped using radar in its vehicles. Then it raised prices for FSD, for its cars, cut mobile connectors from new vehicles, and decided to promote massive layoffs. For the world’s most valuable car company and one that celebrates great financial results each quarter, something was not adding up. Elon Musk disclosed the issue in the third part of his interview with the Tesla Owners Silicon Valley YouTube channel: Giga Austin and Giga Grünheide “are losing insane money right now.”

Ironically, Musk also said Rivian and Lucid were “tracking toward bankruptcy” because they would be losing too much money in this beginning. What the Tesla CEO seems to miss is that both companies have the backup of deep-pocket investors and also a lot of cash in the bank to endure the ramp-up of their factories. Rivian already said it has enough money to increase its lineup and open its Georgia factory. The $17 billion it has in the bank can keep it up until 2025, at least.

On the other hand, Tesla bought bitcoins when the crypto asset lost value, Musk decided to buy Twitter, and we are not very sure how much cash Tesla has to spend while waiting for its two new factories to start generating profits. If it did not have enough, it is wise to ask why it decided to open two new factories almost simultaneously without new products for them to manufacture.

Musk did not spare words to refer to the company’s current situation. He said the German and Texan factories are “gigantic money furnaces” and that they “are losing billions of dollars right now.” Tesla’s priority is putting Giga Shanghai back to the same production levels it had before the lockdown and also to get the two new plants pumping out all the cars they can make as soon as possible.

The Tesla CEO confesses issues with the 4680 cells are among the company's bottlenecks and that Giga Grünheide luckily does not use them in their cars. The thing is so serious that he is concerned about how to keep the factories working “so we can pay people and not go bankrupt.”

All things considered, it is clear that Tesla is burning money primarily because of the decisions it took, not because of the difficulties we already know by heart: supply shortages, the international health crisis, the Russian invasion of Ukraine, and so forth. Unlike Rivian and Lucid, admitting a bankruptcy risk shows Tesla’s money reserves may not be as healthy as they needed to be for it to double its number of factories all at once.

If you liked the article, please follow us:  Google News icon Google News Youtube Instagram
About the author: Gustavo Henrique Ruffo
Gustavo Henrique Ruffo profile photo

Motoring writer since 1998, Gustavo wants to write relevant stories about cars and their shift to a sustainable future.
Full profile


Would you like AUTOEVOLUTION to send you notifications?

You will only receive our top stories