Say What? Tesla Asks Suppliers For "Refunds" To Make It Profitable

ElectricTrump is arrogant.

He could negotiate a different price structure when the contract with a supplier is up, but asking them for money back is in effect renegotiating the contract unilaterally.

Tesla does not have the clout to throw its weight around with suppliers. If I were a supplier, I'd respond with a slow down to remind Elon the Con who's in control.

If he is trying to get money this way, it's a dire prediction of Tesla being in financial ruin.

No doubt reaching the 5000/wk they way they did very was costly and used a lot of precious cash. Musk will need to explain how he will get to his promised profitability as well as how he'll get cash in his Q2 report. He needs things like that to build his story.

Next he'll ask for cash contrubutions from existing owners, because if Telsa goes BK their cars will be worthless.

What a fraud. Anyone who doesn't cancel their order and get their deposit back deserves to lose it.

lmao, elon begging for welfare to sale his crap cars.

What a sh**show.

Musk should take up prostitution. Imagine how much all the Tesla fans that would pay for the thrill of having skin time with ElectricTrump.

This is about the stage in the business cycle where John Z DeLorean holed up with the Fake drug dealers (i.e. the FBI) and tried to sell cocaine to save his company.

If I were advising Elon, I would suggest declining any meetings in hotel rooms.

Funny, those stings always seem to go down in hotel rooms.

And soon the tax incentive for buying a Tesla will go away and sales growth in the last two months was flat. Bob Lutz was right when he said Musk could be successful making expensive EVs like the Models S and X. However Tesla has no unique technology and no mass production experience. He has sailed right into the rest of the industries strong suit. Bad strategy and expensive to ramp up to mass produce cars.

Spot on. I'm really surprised that Elon didn't sell Tesla to someone two years ago. That way he could have finished on a high note rather than ignominy.

Wait WAit WAIt WAIT for the official word from SanJoseDriver. All of you guys got this WRONG

Tesla does not have the buying power to get suppliers to meet their demands. Looks like they are having a cash crunch after almost 25% of the fools who gave Tesla an interest free loan cancelled their preorders.

Elon Musk has his suits made complete with built in knee pads for his begging.
Begging, the liberal left's method of keeping a business afloat. First Musk gets billions from the corrupt obama Kenyan Turd administration and now he has resorted to begging. Pathetic.

I can't wait to see what you all will be saying in 3 months when earnings are released.

@ricks0me You predicted it: "Wait WAit WAIt WAIT for the official word from SanJoseDriver. All of you guys got this WRONG"

But the hits keep on coming. Today's WSJ has a back page article on how Tesla's accounts payables that have gone way up and Tesla has been dragging out paying their vendors. It surmised he is asking for cash back on payments he hasn't even made yet. It also talks about vendors that operate on slim margins and don't have the cash to give to him. His stock price is the only thing he has going for him and the question is why didn't he use it to raise funds 3 months ago? He does have a line of credit based on mortgaging Fremont. But it's hard to see anyway that Tesla can be profitable in Q3 without laying off a lot of people and cutting costs to the bone.

You guys are obviously wrong but are so biased to see it. Waiting for the facts to hit you in the face. I've been in Silicon Valley a long time and the pattern for disruption is always the same. A paradigm shifting tech is introduced, 95% of the population naysay, then once the economics make sense everyone utilizes said new tech. Most of the time the old guard is destroyed and the scrappy startups take over the market. Read the book Innovator's Dilemma if you want to see how this will all play out.

This reminds me of Liz Carmichael and the Dale.

What paradigm has been shifted? Tesla's technology is no different than anyone else's. There's nothing new or innovative in Tesla.

SJD. Having spent a good part of my career with the granddaddy Silicon Valley company before that company was destroyed in the 1990s, I've also seen a lot disruption and done some. Along the way there were a lot of Silicon Valley (and none SV) companies that disrupted but didn't make it across the chasm because they didn't have the management discipline to run a growth company as its product hit broad consumer acceptance. That's the fundamental issue with Tesla and Musk as its leaders. They proved that there is a market for expensive electric cars. They are having real issues with their broader growth market product and having the financial and other resources to make it successful. Worse, they woke up the industry that does have those resources to do that. My company, famous at the time for its culture and management discipline, all through the 70s and 80s had a strategy of being a fast second to the market. Let some small guy go prove there was a potential market, especially with high cost products, and then swoop in with next gen technology, financial strength and mgmt. discipline and take the highly profitable growth segment. Failure is also part of the Silicon Valley story.

@Vette71, thank you for the thoughtful response. I would be curious to learn more about your experiences at some point. I feel pretty confident Tesla will cross the chasm with the Model 3, and we'll know towards the end of the year if they will have the financial resources to continue their expansion. So far, I have not seen a very strong offering from any of their competitors, and am more concerned from Chinese upstarts than any of the established players which are moving too slowly to grab a solid foothold.

SJD Agree that the Chinese are a concern as they are in the best financial position, and have fewer legacy issues and established practices to overcome. If one looks at FCA's strengths and needs and Tesla's as well, you see that a combination with a deep pocketed Chinese auto firm looking to get into global market could buy both and be a real game changer. In FCA they immediately get established distribution channels and service networks for their current products (and Tesla's), design and engineering experienced in local regulations, strong brands and products they don't have in Jeep and RAM. In Tesla they get electric vehicles, battery manufacturing and the potentially highly automated Fremont plant to produce their products. Fremont needs experienced production management to be successful, the folks Musk keeps driving out of Tesla. Dump Solar City. That was a bad move.

It would be one hell of a rollup move and a game changer. Problem is Tesla stock price is way too high to make it work.

Panasonic should just pull the plug on this failing clown or he will take it with him...

Good point. They probably have a Plan B to take it over and sell other auto companies.

Along with another statement - that IF the actually produces BASE model 3s - they would not survive - MUSK has simply admitted that the Base price of the Model 3 is NOT profitable. Since A large percentage of the original orders are for that model - and since the company now allows orders for the HIGHER PRICED Model 3s, what he has said is that his business model is simply UNSUSTAINABLE. THe problem is - if he TRIES to not produce the $35,000 base model units - that will lead to a major class action lawsuit against the company - Musk knows that - and while he has tried to get the Base model Orderers to "give up" and ask for a refund of their deposits - the fact that he favored the people who spent more money COULD lead to the same thing based on the Tax incentives.

And waiting for three months does nothing. HE may get the company out of red ink - but remember - that is without his base model 3 - and therefore is meaningless over time. AS he continues to "propose" new models - other models - he enrages the base model people.

MD: We all knew SJD would chime in ... LOL !!!

Well as long as he's on the payroll and doesn't have the brains to jump ship, we'll see more ludicrous fake facts from SanCarlosJoseDriver.

I have never posted a fake fact nor dodged a question. If I made a mistake, I always accept that and correct myself. I'm not spewing vitriol like other's here, but will call out bullshit when its posted.

@ricks0me It looks like the snowflake is triggered and needs his safe space. Notice also that he didn't bat an eye at being SanCarlosJoseDriver. #admission

@jones *popcorn*

I do not have proof since that race has not been done yet, my comments are speculative based on the data I have just like your comment that it can't beat a Civic is speculative. What we know for sure based on the reviews of people that did take it to the track is that it performs better than the Model S in terms of overheating and times and that the standard brakes get torn up pretty quickly. As there are 0 Performance Model 3s delivered to customers as of today, we won't know for sure until actual track tests are made.

There was no court anything, was settled amicably out of court.

So to recap, Elon stole art, got caught, paid more than it was worth, and used money from Model 3 deposits to pay it off.

Your guess is as good as mine on all 4 of those assumptions.