Tesla asking suppliers for refunds

Automaker makes move in effort to turn a profit

Tesla is reportedly asking for refunds from suppliers in an aggressive tactic designed to help the perpetually money-losing company turn a profit.

The Palo Alto, California-based electric vehicle maker has requested an unknown amount of cash back from suppliers for work done since 2016, according to a Wall Street Journal report.

The move reflects Tesla’s urgency to become profitable after losing more than $4 billion the past six years.

CEO Elon Musk has promised that Tesla would turn a quarterly profit by the end of 2018, though expensive future projects, such as a plan to build a new factory in China, could drag the company back into red ink. One recent move involved cutting 9 percent of the company’s salaried workforce.

The company has never posted a profit for a full year.

Tesla representatives could not be reached for comment Monday morning.

It’s not unusual for automakers to play hardball with suppliers. In fact, it’s common for car companies to press suppliers for price concessions in a never-ending tug-of-war.

But it’s not typical for automakers to ask for cash back for past work, absent allegations of defects or insufficient performance.

Musk has had a complicated relationship with suppliers in the past.

While trying to accelerate production of the company’s critical Model 3 electric sedan, he blamed one unidentified supplier in November for slowing down production.

At other times, he has expressed heartfelt appreciation for their efforts.

“They’ve really burned the midnight oil, spent weekends and taking a lot of risks and suffered alongside us in the challenges associated with the ramp,” Musk said in February. “So I’d like to thank them for supporting us through this difficult time with Model 3.”