Electric vehicle maker Tesla is facing billions of dollars in losses from its new production plants, supply chain issues and pandemic-related lockdowns, which has led CEO Elon Musk to mention the possibility of bankruptcy in a recent interview, CNN Business reported.

“The past two years have been an absolute nightmare of supply chain interruptions, one thing after another. We’re not out of it yet; overwhelmingly our concern is how do we keep the factories operating so we can pay people and not go bankrupt,” Musk was quoted as saying in an interview with a Tesla owners group.

Tesla is coming to the end of what is turning out to be its most difficult quarter in two years, CNN Business wrote, due in part to the operations shutdown of its Shanghai factory due to Covid-related lockdowns in the Chinese city.

Musk also revealed in the interview that the company’s factories in Berlin, Germany and Texas, United States are costing the company “billions of dollars” in losses due to supply chain issues that has left the firm with “puny” output so far, the report cited comments recorded at the end of May but not released until last week.

“Bankruptcy is a real risk for [Tesla], [because] a lot of their cash is locked up in China,” said Gordon Johnson of GLJ Research to CNN Business. Tesla was not profitable until venturing into China, and China does not allow companies to repatriate money made in the country, which presents Tesla with “a real problem”, he said.

The American electric vehicle maker reported its first quarterly net profit in two years in Q3 2018, and recorded its best sales, profit and revenue in the third quarter of last year. That successive run of profit is set to end, according to analysts surveyed by Refinitiv, CNN Business reported.

The analysts forecast that Tesla’s adjusted earnings in Q2 2022 will drop to US$2.5 billion (RM11 billion), down from the US$3.7 billion (RM16.3 billion) it made in Q1 2022. This would however still be an increase over the adjusted income of US$1.6 billion (RM7.03 billion) it recorded in the second quarter of 2021, according to the report.

Tesla sustained a 0.1% reduction in vehicle production in Q1 2022 compared to Q4 2021, CNN Business wrote, though year-on-year production was 69% higher.