Tesla says it requested supplier discount for ongoing projects

24 July, 2018, 18:55 | Author: Lora Ball
  • Tesla Asks Suppliers for Cash Back in a Bid to Achieve Profitability

The Journal reported that Tesla had turned to some suppliers for a refund of previously made payments in a bid to turn a profit, citing a memo sent by a Tesla global supply manager.

Despite the belt-tightening, many analysts still predict Tesla will eventually need to raise more money.

Becoming cash-flow positive is the primary goal of Chief Executive, Elon Musk, who said he wants to avoid raising additional cash, and turn a profit in the second half of the year.

At the end of its last reporting period, Tesla revealed that it had about $3.3 billion in cash on hand as had lost about $800 million for the quarter.

When a company asks suppliers to retroactively give money back, it's a sign that something has gone wrong.

The leak comes as Musk continues to unnerve investors, with Tesla shares falling from a year high of US$370 in mid-June to around US$301 on Monday.

In the meantime, manufacturing consultant Dennis Virag told The WSJ that Tesla's request shows that it's "desperate right now", and that the company is "worried about their profitability but they don't care about their suppliers' profitability".

More news: Judge denies Manafort's request to suppress evidence

Company CEO Elon Musk stated on his official Twitter account that any refunds from suppliers would only involve those from Q3 and beyond would be counted.

"This is troubling for us to hear", said Morningstar analyst David Whiston in a note to clients.

The report also said it's not clear how many suppliers received the request.

Tesla in late June finally hit an important production target for the Model 3, its most accessibly priced electric vehicle.

As a refresher, Musk told Bloomberg: "Once we break through to mass-market cars, where mass-market is on the order of a quarter million vehicles per year, I can not see us doing a 1.2-million-vehicle program of one particular model". The firm is less focused on one-time reductions for this quarter as it is on reaching a "more sustainable long-term cost basis".

Tesla shares prices are down by 3%.

Recommended:



Popular

North Korea removes key facilities at missile launching station
Pyongyang apparently has a big demand for the US if the latter wants to keep talking about North Korea's nuclear arsenal. Images sent to CBN News by 38 North show North Korea's main satellite launch facility is starting to be dismantled.

Injuries reported in downtown Toronto shooting, gunman killed
Paramedics tell CityNews the scene encompasses several blocks and a number of victims have sustained significant injuries. Mr Saunders confirmed that a fifteenth person, the gunman, was killed after an "exchange of gunfire" with authorities.

North Korean Economy Suffered Sharpest Drop In 2 Decades, South Says
He said a second message they delivered was that "to achieve that, full implementation of the sanctions is absolutely crucial". Trump appeared to toward North Korea this week, saying that a more gradual option of denuclearization was a possibility.

Take a look at the limited edition Spider-Man PS4 Pro bundle
The gorgeous pop-art design carries over to the bundled DualShock 4 controller, which has a similar red-and-white color scheme. Available as part of a Spider-Man PS4 bundle, gamers can jump into the action on September 7, when the console goes on sale.

Chelsea set to sign Sarri, says Napoli president
Chelsea have also indefinitely postponed plans to rebuild Stamford Bridge in a scheme which would cost more than £1billion. Sarri has replaced Conte as boss before, with a short-lived spell at Arezzo in 2006-07 before Conte was reappointed.

The Walking Dead: The Most Revealing Moments of SDCC's Season 9 Trailer
And a large part of me will always be a machete-wielding, stetson-wearing, zombie-slaying sheriff's deputy from London, England. Still, I hope season 9 turns things around and gives those who have stuck with the show everything they're hoping for.

Putin summit: US leader cautious ahead of Helsinki talks
They expressed alarm at Trump's decision to lash out at European allies at last week's North Atlantic Treaty Organisation summit. It said it did not expect much from the meeting but hoped it would be a "first step" to resolving a crisis in ties.

Israel adopts divisive Jewish nation-state law
It also stripped the Arabic language of its official status , giving it instead a vague "special status" designation. Adalah, the Legal Center for Arab Minority Rights in Israel, said the law has "apartheid characteristics".

These Kids Recreated The World Cup Final And It's Brilliant
It became known what they talked about, Deschamps and the French football team at halftime of the final of the 2018 world Cup. And the joyous interactions between Mr Macron and Croatia's president Kolinda Grabar-Kitarović didn't go unnoticed either.

Hawaii volcano boat tours continue after lava injuries
In the early morning incident a "lava bomb" punctured the roof of the boat and damaged a railing, the department said. The other 22 were treated for minor burns and scrapes, including 12 who were treated at a hospital in Hilo.