According to a leaked memo, the company is requesting money back from suppliers to help the vehicle company become profitable, as if this is the responsibility of the company's suppliers. The WSJ calls the sum "meaningful", and reports that the refunds are on payments made since 2016.
The memo notes the refund was essential for Tesla's survival and would be an investment in the company to ensure the long-term partnership between it and the suppliers.
The U.S. auto manufacturer declined to comment on the specific memo, but confirmed it's seeking price reductions from suppliers for projects, some of which go back to 2016, according to the report. Musk has pushed back on naysayers, arguing that the company will be profitable this quarter and next. "Usually, carmakers play hardball with suppliers going forward, not backward". It will release its second quarter results next week. "They're anxious about their profitability but they don't care about their suppliers' profitability". As a spokesperson told us "The remainder of our discussions with suppliers are entirely focused on future parts price and design or process changes that will help us lower fundamental costs rather than prior period adjustments of capex projects".
This development comes at a critical time as the company is struggling to boost production of its first mainstream model, the Model 3. "It would not be correct to apply historical cost savings to current quarter", tweeted Musk.
Even though Tesla is making more of the sedans, the company won't complete delivery and collect revenue for many of them until the third quarter, Whiston said.
The company's rapidly weakening cash position has spooked investors, and comes despite the claims of founder Elon Musk that Tesla is now a "real" carmaker after hitting a weekly goal of producing more than 5,000 mass-market Model 3s, the rate of production that the manufacturer hopes will turn the company's economic position around. That's not to mention that it is sure to make future suppliers leery of working with Tesla.
Meanwhile Musk said earlier this year that he was sleeping on the factory floor because he was so busy trying to ramp up production.