Tesla asks suppliers for refund
According to The Wall Street Journal which could lay hands on an internal memo, Tesla has asked a number of suppliers to refund part of what the car manufacturer has previously paid them. Asking suppliers for rebates to help launching a new product is a common practice, but asking for a refund afterwards is quite unusual.
Last month, according to the newspaper, the manufacturer of electric cars also asked customers, who had already made a 1.000 dollar deposit for their order of the Model 3, to pay an extra 2.500 dollar to have their car delivered at all.
Tesla asks the suppliers to repay “a substantial amount” of the payments made since 2016. The request was made to ensure the continuity of Tesla as a company and its long-term relationship with its suppliers.
The repayment would also help the loss-making Tesla to become profitable. It is well-known that car manufacturers try to negotiate the lowest possible price from their suppliers. But asking for a refund for delivered work and material is unusual, automotive consultants say.
The new call in such a short space of time illustrates that Tesla is desperate for cash in order to secure production, certain analysts assume. Earlier, chairman Elon Musk assured that he did not have to look for extra funding for the rest of the year. According to CEO Elon Musk, the refund asked for is to support cash flow on the long term, Tesla wants to reach profitability on its own.
The American car manufacturer has struggled with production problems for some time with its Model 3. Recently, the company announced that it had succeeded in producing 5.000 Model 3s per week, a target that should have been achieved six months earlier.
In the meantime, Tesla burned about 1 billion dollar in one quarter, but still had 2,7 billion dollar in cash. Musk says to be able to cut back the investment level for this year with 400.000 dollar to under 3 billion dollar. At the end of this year, Tesla will have to repay 2 billion dollar in debts.