• India
  • Business
  • World
  • Politics
  • Sports
  • Technology
  • Entertainment
  • Auto
  • Lifestyle
More
Hindi Tamil Telugu
More
In the news
Narendra Modi
Amit Shah
Box Office Collection
Bharatiya Janata Party (BJP)
OTT releases
Hindi Tamil Telugu
User Placeholder

Hi,

Logout

India
Business
World
Politics
Sports
Technology
Entertainment
Auto
Lifestyle
Inspirational
Career
Bengaluru
Delhi
Mumbai

Download Android App

Follow us on
  • Facebook
  • Twitter
  • Linkedin
Home / News / Business News / Did Tesla ask its suppliers for refunds to appear profitable?
Next Article
Did Tesla ask its suppliers for refunds to appear profitable?

Did Tesla ask its suppliers for refunds to appear profitable?

By Shiladitya Ray
Jul 24, 2018
11:08 am

What's the story

Tesla seems to be in the midst of yet another controversy.

On Sunday, the Wall Street Journal, based on a memo it had obtained from one of Tesla's global supply managers, reported that the car manufacturer was asking for retroactive refunds from its suppliers to appear profitable.

Understandably, Tesla drew considerable criticism, despite the company's assurances that such was not the case.

Here's more.

Memo

Details of the memo reviewed by the WSJ

The WSJ reviewed a memo sent to one of Tesla's suppliers that requested the supplier to refund a "meaningful amount" of money Tesla had paid it since 2016.

The memo, sent by one of Tesla's global supply managers, said that the money was "essential" for Tesla to continue operating, and that the supplier should view the refund as an "investment" for a long-term relationship.

You're
16%
through

Other details

Many think Tesla's request was bizarre and desperate

Although the memo reportedly claimed that all suppliers were receiving such refund requests, not all suppliers contacted by the WSJ seemed to be aware of the issue.

Meanwhile, a Tesla spokesperson had told WSJ that asking for such refunds was a "standard" practice.

People outside Tesla, however, including experts, thought that Tesla's request was downright bizarre, self-centred, and desperate.

You're
33%
through

Quote

Experts weigh in on Tesla's bizarre request

"I have never heard of that. Suppliers have been asked for reductions, but going back for them in arrears reeks of desperation," said finance expert Ron Harbour to Bloomberg. David Whiston, another prominent financial analyst, called Tesla's request "troubling".

You're
50%
through

Tesla's response

Details about Tesla's response to the WSJ report

In its response to the WSJ report, Tesla said that it was negotiating with suppliers in a bid to reach a "more sustainable long-term cost basis", and that fewer than 10 suppliers had been requested for a refund.

It added that other discussions with suppliers were focused on price negotiations for future supplies.

Despite the assurance, Tesla's shares closed, down by 3.3% on Monday.

You're
66%
through

Twitter Post

Tesla CEO Elon Musk, of course, had to respond

Only costs that actually apply to Q3 beyond will be counted. It would not be correct to apply historical cost savings to current quarter.

— Elon Musk (@elonmusk) July 23, 2018
You're
83%
through

Tesla's situation

Tesla's financial woes point towards a troubling situation indeed

Looking at figures, Tesla's situation does seem troubling.

In the midst of a financial crisis, Tesla's current woes are centred around its Model 3 car that has faced several production issues resulting in delays in deliveries around the world.

While Tesla has stepped up production of the Model 3, revenues from sales aren't expected before Q3 2018.

Additionally, Tesla carries a $10bn debt burden.

Done!
Facebook
Whatsapp
Twitter
Linkedin
Related News
Latest
Elon Musk
Tesla
Tesla Model 3

Latest

New EV under $15,000?—BYD's latest is 50% cheaper than Tesla BYD
'India has military capabilities to strike..entire Pakistan': Top Army officer  Indian Army
Bankrupt 23andMe sold for $256M—Who owns 15M DNA profiles now? DNA
'Russia, Ukraine will immediately start ceasefire negotiations': Trump Donald Trump

Elon Musk

SpaceX to launch world's most powerful rocket by January end SpaceX
Elon Musk has some "audacious" goals, or there's no salary Startups
SpaceX meant to expend its rocket, ends up landing it SpaceX
SpaceX builds the most powerful rocket in the world SpaceX

Tesla

Tesla opens pre-orders for Solar Roof Elon Musk
Tesla will not be plying on Indian roads anytime soon India
Elon Musk's Tesla apparently wants its own music streaming service Music Industry
Tesla looks to start manufacturing cars in China Electric Vehicles

Tesla Model 3

Premium sedan Lucid Air eyes Tesla Model 3 market Tesla Model S
How can you reserve your Tesla's Model 3? India
BMW confirms Electric Mini; to go into production in 2019 Electric Vehicles
Tesla's Model 3, the electric beauty with a 310-mile range Electric Vehicles
Indian Premier League (IPL) Celebrity Hollywood Bollywood UEFA Champions League Tennis Football Smartphones Cryptocurrency Upcoming Movies Premier League Cricket News Latest automobiles Latest Cars Upcoming Cars Latest Bikes Upcoming Tablets
About Us Privacy Policy Terms & Conditions Contact Us Ethical Conduct Grievance Redressal News News Archive Topics Archive Download DevBytes Find Cricket Statistics
Follow us on
Facebook Twitter Linkedin
All rights reserved © NewsBytes 2025