Tesla Asking Suppliers For Cash Back To Help Turn A Profit, Says WSJ

Tesla Motors has requested from some of its suppliers to refund a portion of what the electric car maker has spent previously to help it return a profit, according to a report from Wall Street Journal.

The EV maker has reportedly sent a memo, which was reviewed by WSJ, to a supplier last week. In the memo, Tesla asked from its supplier to return what it calls a meaningful amount of money of its payments since 2016.

The memo, which was sent by a global supply manager, described the request as essential to Tesla’s continued operation and says that it will be an investment in the EV maker to continue the long-term growth between them and the supplier.

Tesla also said in the memo that all suppliers were being asked to help them become profitable, but it’s still unclear how many of were asked for refunds.

While the automaker declined to comment on the memo, Elon Musk said on Twitter that the company’s request aims to reduce costs that apply only to Q3 and beyond. “It would not be correct to apply historical cost savings to current quarter”, Musk added.

Tesla’s latest requests from suppliers raise further questions about the company’s cash position. Following months of delays, it managed to reach its self-imposed goal of building 5,000 Model 3 vehicles in a single week, which, if sustained, will help the Palo Alto company turn a profit for the first time in its history.