Tesla shares drop after carmaker reportedly asks its suppliers for refunds to reach profitability
- Tesla is reportedly requesting its suppliers to give cash back from previous payments to help the carmaker become profitable.
- The Wall Street Journal cites a Tesla memo asking a supplier to return a “meaningful amount of money of its payments since 2016.”
Tesla shares are falling on a report that the electric car maker has asked some suppliers to refund a portion of previous payments made by the company.
In its report Sunday, The Wall Street Journal cited a Tesla memo asking a supplier last week to return a “meaningful amount of money of its payments since 2016.”
The memo said all suppliers were being asked to help Tesla become profitable, the newspaper said, but added that it was unclear how many were asked for retroactive discounts.
Tesla shares were down 4.3 percent in Monday’s premarket.
The Journal said other suppliers the media outlet contacted said they were not aware of the request.
Tesla did not immediately respond to a request for comment. It is slated to report its June quarter earnings results on Aug. 1.
In May, Tesla said it expects positive GAAP net income in its third and fourth quarters.
The latest report calls into question the state of Telsa’s financial position. The company lost nearly $2 billion last year and burned about $3.4 billion in cash after capital investments. It had $2.7 billion in cash at the end of the March quarter.
See the full Wall Street Journal report here.
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