Tesla plunges after report suppliers asked to hand back cash

Tesla Appeals To Suppliers For Refunds To Buffer Cash Position

Tesla requested the supplier return what it calls a meaningful amount of money of its payments since 2016, according to the memo.

Chief Executive Officer Elon Musk also tweeted https://twitter.com/elonmusk/status/1021285179178881025: "Only costs that actually apply to Q3 & beyond will be counted".

Becoming profitable is clearly a top priority for Musk, who is juggling several highly ambitious companies at the moment, including both SpaceX and the Boring Company.

"It's troubling", David Whiston, an analyst with Morningstar in Chicago, said in an interview on Monday as Tesla's stock declined, closing off 3.3 percent.

The Journal said Tesla confirmed that it is "seeking price reductions from suppliers for projects, some of which date back to 2016, and some of which haven't been completed".

"We still have the same concerns, though, about general cash flow needs for the company, production quality issues, automation or lack thereof, as well as concerns on profitability", Mr Osborne said. "It would not be correct to apply historical cost savings to current quarter". Tesla has been hemorrhaging cash at a rate of about US$1 billion a quarter, and finished the first quarter of 2018 with US$ 2.7 billion in cash on hand. It's down from a peak of $385 in September, with many investors growing concerned about Tesla's spending and its ability to meet its production goals.




Tesla did not respond to a BBC request for comment.

Tesla has been burning through cash as it ramps up production of its Model 3 sedan.

All of that has to happen while Tesla carries $10.5 billion in debt. An analyst at Baillie Gifford, Tesla's third-largest institutional shareholder, told the Journal the firm is "divided" on whether Musk is the right leader for Tesla going forward.

Tesla's share price is now down 4.22 per cent, after hitting a low of 4.3 per cent in pre-market trading this morning.

According to the Journal, Tesla is facing payments on $230 million in debt in November if its stock price doesn't reach a conversion price of $560.6 per share.

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