NewsWorldElon Musk claims he is working to prevent Tesla...

Elon Musk claims he is working to prevent Tesla from going bankrupt

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Tesla plans to lay off 10% of its staff 1:04 New York (CNN Business) — Tesla faces billions of dollars in losses from its new plants, supply chain problems and closures due to Covid, which enough for its CEO, Elon Musk, to mention the possibility of bankruptcy in a recent interview.
“The last two years have been an absolute nightmare of supply chain disruptions, one thing after another,” Musk said in an interview with a group of Tesla owners. “We’re not out of it yet. Our biggest concern is how to keep factories running so we can pay people and not go bankrupt.” Musk engaged in hyperbole elsewhere in the interview, and that may have been the case when he mentioned the risk of bankruptcy. For example, he said automakers in general “desperately want to be out of business,” which falls into the category of colorful language rather than strict financial analysis. But the company is coming to the end of its toughest quarter, financially speaking, in more than two years. Tesla’s factory in Shanghai was closed for weeks due to covid-related lockdowns in the city. And Musk revealed in the interview that the two factories Tesla opened in the quarter, in Germany and Texas, are costing the company billions of dollars in losses because supply chain problems have left them with a production ” insignificant” so far. “This is all going to be fixed very quickly,” he said in comments recorded on May 31 but not published until late Wednesday. “Both the Berlin and Austin factories are gigantic furnaces of money right now. There’s a giant roar that’s the sound of money on fire. Bigger than a shipping container [de basura]. A dumpster is too small. Berlin and Austin are losing billions of dollars right now. There are a lot of expenses and hardly any results.” One of Tesla’s harshest critics believes the company is facing bigger financial problems than most analysts realize. “Bankruptcy is a real risk for these guys.” Gordon Johnson of GLJ Research told CNN Business on Thursday.”Why? Much of his cash is locked up in China. They weren’t profitable until they were in China; And since China doesn’t allow companies to repatriate dollars made there, Tesla has a real problem.” Johnson pointed to Tesla’s decision to cut about 10% of its salaried staff, even as it continues to hire production workers for hours, as another sign of trouble.” Why do you think they’re cutting staff? That’s a key signal,” he said. But most companies that cut staff never go bankrupt. And virtually every other analyst forecasts that Tesla will remain profitable, despite the supply chain problems that plague it. are after her and most other manufacturers around the world.Tesla has been profitable since the end of 2018, after years of reporting almost nothing but losses.The company has been reporting an increase in quarterly profit compared to the previous period for the past two years. That string of rising profits is seemingly about to come to an end. Analysts surveyed by Refinitiv forecast second-quarter adjusted earnings to fall to $2.5 billion in the second quarter, down from Tesla made a record $3.7 billion in Q1, which would still be higher than adjusted revenue of $1.6 billion in Q2. quarter of 2021. Tesla had a 0.1% drop in new vehicle production in the first quarter compared to the fourth quarter. But its year-on-year output reported a 69% increase, with most other automakers around the world cutting production in the quarter from a year earlier due to supply chain problems. Automakers including Tesla are due to report second-quarter sales figures early next month. Shares of Tesla, which have fallen nearly a third since the start of the year, were down about 2% in midday trading on Thursday.

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