Sydney — Tesla asked some suppliers to return a
portion of its payments to them in an attempt by the electric-car maker
to turn a profit, the Wall Street Journal reported, citing a memo sent
to a supplier last week.
The company, whose eroding cash position has alarmed investors, requested a "meaningful" amount of payments made since 2016 to be returned, according to the letter.
The note stated all suppliers had been asked to help the Californian company become profitable.
The request indicates more struggles for Tesla in its quest to reverse losses.
While CEO Elon Musk proclaimed Tesla a "real" car maker after hitting a weekly goal of producing more than 5,000 mass-market Model 3s, there is doubt about whether the volumes can be sustained. Some of the increased output, pivotal for boosting revenue and earnings, came from a makeshift tent.
Tesla shares fell 4.1% in pre-market trading on Tradegate on Monday.
The US car manufacturer declined to comment on the specific memo, but confirmed it was seeking price reductions from suppliers for projects, some of which go back to 2016, according to the report.
Tesla called such requests a standard part of procurement negotiations to improve its competitive advantage, especially as it increases Model 3 production, the Journal said.
Money back
It is not clear how many suppliers were asked to hand back money, with some saying they were not aware of the request, the newspaper said. Panasonic, Magna International, Continental and Robert Bosch are among Tesla’s suppliers, according to data compiled by Bloomberg.
It is not so unusual for car makers to ask suppliers for discounts retroactively, and some Japanese car makers have done it before, says Tatsuo Yoshida, an analyst at Sawakami Asset Management in Tokyo, who worked at Nissan Motor between 1983 and 1999.
The company, whose eroding cash position has alarmed investors, requested a "meaningful" amount of payments made since 2016 to be returned, according to the letter.
The note stated all suppliers had been asked to help the Californian company become profitable.
The request indicates more struggles for Tesla in its quest to reverse losses.
While CEO Elon Musk proclaimed Tesla a "real" car maker after hitting a weekly goal of producing more than 5,000 mass-market Model 3s, there is doubt about whether the volumes can be sustained. Some of the increased output, pivotal for boosting revenue and earnings, came from a makeshift tent.
Tesla shares fell 4.1% in pre-market trading on Tradegate on Monday.The US car manufacturer declined to comment on the specific memo, but confirmed it was seeking price reductions from suppliers for projects, some of which go back to 2016, according to the report.
Tesla called such requests a standard part of procurement negotiations to improve its competitive advantage, especially as it increases Model 3 production, the Journal said.
Money back
It is not clear how many suppliers were asked to hand back money, with some saying they were not aware of the request, the newspaper said. Panasonic, Magna International, Continental and Robert Bosch are among Tesla’s suppliers, according to data compiled by Bloomberg.
It is not so unusual for car makers to ask suppliers for discounts retroactively, and some Japanese car makers have done it before, says Tatsuo Yoshida, an analyst at Sawakami Asset Management in Tokyo, who worked at Nissan Motor between 1983 and 1999.
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