Tesla turns to suppliers for refund
Shares of Tesla fell more than four per cent, after a report that the electric car maker has turned to some suppliers for a refund of previously made payments in a bid to turn a profit.
Retroactive rebates is not something we hear much about, and this is troubling to hear
David Whiston, Analyst with Morningstar
pao alto — Shares of Tesla fell more than 4 per cent in trading before the bell on Monday, after a report that the electric car maker has turned to some suppliers for a refund of previously made payments in a bid to turn a profit.
Tesla has asked some suppliers to refund money paid by the electric car maker since 2016, the
reported on Sunday citing a memo.
The memo, which the paper said was sent by a global supply manager, described the request as essential to Tesla’s continued operation and characterised it as an investment in the car company to continue the long-term growth between both players.
The quoted Tesla as confirming it is seeking price reductions for projects, some of which date back to 2016.
Chief executive officer Elon Musk also tweeted: “Only costs that actually apply to Q3 & beyond will be counted. It would not be correct to apply historical cost savings to current quarter.”
“Automakers often have brutal pricing demands on suppliers for future work, but retroactive rebates is not something we hear much about, and this is troubling for us to hear,” David Whiston, an analyst with brokerage Morningstar wrote in a note to clients.