"The Silicon Valley electric auto company said it 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".
Tesla, whose eroding cash position has alarmed investors, requested a "meaningful" amount of payments made since 2016 to be returned, according to the letter. The memo said all suppliers were being asked to help the company become profitable.
The memo, which the paper said was sent by a global supply manager, described the request as essential to Tesla's continued operation and characterized it as an investment in the vehicle company to continue the long-term growth between both players. Analysts say Tesla needs to sell a lot more cars. "This is troubling for us to hear", said Morningstar analyst David Whiston in a note to clients.
Tesla burned through more than $700 million in the first quarter - leaving it with $2.7 billion cash on hand.
Another tweet from Elon Musk, and Tesla stock is tumbling. Musk has pushed back on naysayers, arguing that the company will be profitable this quarter and next. "It would not be correct to apply historical cost savings to current quarter".
Tesla's Australia and Asia media office, as well as a spokesman and spokeswoman in the US, didn't reply to emails seeking comment on the Journal report.
Tesla had previously experienced serious production delays on its Model 3, which reportedly also impacted its supplier.
The latest bad news came after the entrepreneur got it a confrontation with Vernon Unsworth, a British cave diver who helped rescue a team of Thai soccer players from a system of flooded caves.