Tesla has asked some of its suppliers to return parts of payments that the
carmaker has made since 2016 in an attempt to turn in a profit after years of
burning cash, the Wall Street Journal reports, citing
a memo sent to at least one supplier by a Tesla global supply manager.
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. It suggested that all Tesla suppliers were being asked to
make partial refunds, but some of the companies that the WSJ talked to denied
any knowledge of such a request.
Tesla itself confirmed sending the memo, referring to it as part of
standard procurement operations and describing it as a retroactive request
for price discounts on services rendered.
The carmaker is facing growing investor pressure as it struggles to ramp
up the production of what is to be its flagship model, the Model 3, and
reverse a loss-making streak that has been with it since its inception.
Tesla announced it hit its target of 5,000 Model 3s weekly in late June
after several delays, but the market reacted skeptically, with analysts
noting hitting that the target was one thing while sustaining it was another.
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The Model 3 endeavor is widely seen as the project that will make or break
Tesla. The company has been burning cash at worrying rates, with US$1
billion spent during the first quarter of this year alone. As investors
started to get restless, Musk kept on making grand promises for future Tesla
models and new Model 3 versions, which probably only added investor
annoyance.
Yet besides the Model 3 delays, Tesla has also been plagued by unwanted
media attention regarding three crashes involving its vehicles with the
drivers claiming the Autopilot system was switched on at the time of the
accident. Road safety authorities are investigating the crashes, and the
company has repeatedly noted that it always warns drivers that the Autopilot
does not replace the human at the wheel. Nevertheless, the media noise has
not been of any help to the cash-strapped carmaker.
By Irina Slav for Oilprice.com
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