“Money furnaces”

Kirkhorn told investors on the earnings call that the company is “working through the ramp inefficiencies of our new factories, which are progressing well, but have had an impact on margins as those factories come online.” Musk has called the Austin and Berlin facilities “money furnaces.”

Steep investments in the new factories, along with lower car sales, caused Tesla’s operating profits to drop nearly a third last quarter, the biggest drop since 2019.

Tesla executives hint at “record breaking” second half production

Despite Tesla’s recent challenges, executives projected optimism about the remainder of the year. Musk emphasized that Tesla’s factories in Shanghai and Fremont hit record levels of output in June.

“As a result, we have the potential for a record breaking second half of the year,” he said, before adding: “I do want to emphasize this is obviously subject to force majeure, things outside of our control. The past few years, there have been quite a few force majeures.”

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