He’s become focused intently on becoming cash-flow positive, a person familiar with his thinking said. Musk cut Tesla’s workforce by 9% in June and promised to slow other spending as well. Shares closed Friday at $313.58, and are down about 4.5% over the past 12 months.Īs part of Tesla’s bid to become profitable, Mr. Tesla will need to pay down a $230 million convertible bond this November if its stock doesn’t reach a conversion price of $560.64, and a $920 million convertible note next March if the stock doesn’t reach $359.87.
“They’re worried about their profitability but they don’t care about their suppliers’ profitability.” “It’s simply ludicrous and it just shows that Tesla is desperate right now,” he said. The surprising requests raise further questions about Tesla’s cash position, which has dwindled after it struggled to boost production of its first car designed for mainstream buyers, the Model 3.ĭennis Virag, a manufacturing consultant who has worked in the automotive industry for 40 years, said a solicitation like Tesla’s could put suppliers in financial peril and jeopardize its future supply of car parts. Tesla requested the supplier return what it calls a meaningful amount of money of its payments since 2016, according to the memo. Tesla is asking its suppliers for cash back to help it become profitable, according to a memo reviewed by The Wall Street Journal that was sent to a supplier last week. It is extremely strange, at a minimum, for manufacturers to seek Cash Back On Prior Orders to Help Turn a Profit.
It’s not unusual for manufacturers to seek concessions on future orders.