A prolonged production slowdown in China due to strict Covid-related protocols lasted longer than CEO Elon Musk anticipated and the company worked through startup pains at new plants in Germany and Texas.
In its quarterly release, Tesla cited “ongoing supply chain challenges and factory shutdowns beyond our control.”The slowdown in China, Tesla’s most profitable market, comes after a period of relative stability in terms of profit and production growth for Elon Musk’s EV powerhouse. Along with a slower pace of deliveries the quarter also brought Tesla’s first large-scale job cuts that Musk, who expects the U.S. economy to fall into recession, said will affect about 3.5% of employees worldwide.
. “Berlin and Austin are losing billions of dollars right now because there's a ton of expense and hardly any output.”VCG via Getty Images “Notwithstanding new issues that arise, I think we will see a record output per week from Giga Shanghai this quarter, albeit we are missing a couple of weeks,” the billionaire entrepreneur told analysts and investors on April 20. “Most likely vehicle production in Q2 will be similar to Q1, maybe slightly lower. But it’s also possible we may pull a rabbit out of the hat and be slightly higher.”
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