Tesla is asking suppliers to refund money the electric company has already spent as it struggles to maintain profitability amid strong headwinds, The Wall Street Journal reported Sunday.
The California company is asking parts’ suppliers for cash back, according to a memo that was sent to a supplier, the report notes. Tesla requested the suppliers to return large amounts of money on payments since 2016. The move also comes as CEO Elon Musk’s Twitter behavior becomes more and more belligerent.
Tesla confirmed that it’s working on price reductions from suppliers for projects. The company called its requests standard protocol for companies working on gaining an advantage in the auto industry. Musk managed to push out more than 5,000 Model S vehicles on deadline, a move Tesla claims will set the company on a course for profitably.
Musk initially planned to produce 5,000 Model 3 sedans a week by the end of 2017. That number was quickly revised as the inexpensive vehicle’s production began faltering.
The company managed to build a mere 260 Model 3s between July and September 2017. Total orders for the vehicle tumbled from a high of 518,000 to 455,000. Production on the highly touted vehicle was expected to expand from 100 cars in August to 1,500 in September then plateau to 20,000 per month in December 2017.
Musk promised to eventually produce 20,000 cars per month. Analysts alleged in the past that Musk and Tesla are operating a type of Ponzi scheme designed to use customer deposits to prop up the beleaguered company’s fledgling production capacity. (RELATED: New Market Report Calls Tesla A ‘Ponzi Scheme’ Similar To Enron)
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