Tesla requests rebates from its suppliers

How can a large company, put under pressure by the financial markets, to get cash flow quickly? By demanding rebates from its suppliers.

This is basically what a head of supply at Tesla asked, according to an internal note that the Wall Street Journal (WSJ) was able to consult.

The American manufacturer considers this request "essential" in order to be supported in a period of intense development that requires a need for cash.

"essential" request

The note, consulted by the WSJ , reports a demand deemed "essential" to the continuation of Tesla's operations, and promises the continuation of a long-term growth between the various actors, suppliers and constructor.

The WSJ considers this request surprising. Citing industry experts, the newspaper considers it usual to ask for discounts on ongoing programs, but not on contracts already paid. Tesla, contacted by the newspaper, considers this request as normal.

Quoted by the WSJ, Denis Virag, construction consultant, thinks that suppliers will be more and more cautious when it comes to working with Tesla: "It's just ridiculous and it shows that Tesla is desperate. They are concerned about their profitability but do not take into account that of their suppliers "

The concern of investors

Since the launch of Tesla in 2003, the manufacturer of electric cars has never won money. The Model 3, the first model for the general public, was supposed to contribute to correcting the accounts. But the difficulties accumulated and in June, the builder announced the removal of 9% of its workforce.

Investors are worried about whether Tesla will ever be profitable. The production of its flagship model, the Model 3, has experienced many problems and its goal of 5,000 cars produced per week has been narrowly achieved. In addition, the company continues to burn its cash: Tesla's losses in the first quarter amounted to $ 710 million.

The manufacturer has already lost today 2% to the NASDAQ index of the Stock Exchange New York and investors will pay close attention to the results of the second quarter, to be released August 1.

Paul Boulben