Please ensure Javascript is enabled for purposes of website accessibility
Tesla Stock Skids on Reports It Asked Suppliers for Refunds
gvw_ap_news
By Associated Press
Published 7 years ago on
July 23, 2018

Share

NEW YORK — Shares of Tesla tumbled Monday on reports that the company asked suppliers for refunds to help it turn a profit.
A memo provided to The Wall Street Journal shows the electric car maker asked a supplier to return what it calls a meaningful amount of money on its payments since 2016. The memo said all suppliers were being asked to help the company become profitable.
Tesla declined to comment on the specific memo, but confirmed that it is seeking price reductions from suppliers for projects, some of which date back that far.
Tesla stock fell 3.5 percent to $302.61 Monday afternoon. It’s down from a peak of $385 in September, with many investors growing concerned about Tesla’s spending and its ability to meet its production goals.

Tesla Has Never Made a Profit for a Full Year

The request raised more questions about Tesla’s cash position. The 15-year-old company has reported only two quarterly profits in its history and has never made a profit for a full year. It is spending about $1 billion a quarter as it ramps up manufacturing of the Model 3 sedan, a lower-priced car that is key to Tesla’s plans of becoming a major mass-market automaker.
“What stuck out to us as a negative is that Tesla’s memo reportedly described the request as essential to the company’s continued operation,” Citi Investment Research analyst Itay Michaeli wrote in a note to clients.
Efraim Levy, a senior equity analyst for CFRA, said he found Tesla’s request unusual.

“I haven’t heard of this being done before and I’ve been following the industry for 20 years. It sounds like something that happens when you’re struggling.” — Efraim Levy, senior equity analyst for CFRA
Tesla had $2.7 billion in cash on hand at the end of the first quarter and many experts think it will need to raise money soon. One way to do that is by selling stock, which could send its share price lower still.
CEO and top shareholder Elon Musk has said that Tesla intends to become profitable in the second half of 2018, and analysts said Monday that the memo is an attempt to meet that goal. But they said if Tesla has to try this hard to meet its target, it might be a self-defeating effort.
“If there are any one-time windfalls that aid in Tesla achieving its profit goals, we expect the market would view that as unsustainable,” said Jamie Albertine, senior automotive analyst for Consumer Edge.
In June the company said it was eliminating 3,600 jobs, or 9 percent of its staff, as part of a restructuring effort. At the beginning of July the company said it met a long-time target of building 5,000 Model 3s in a week, but industry analysts have questioned whether Tesla can sustain that pace.

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

Authorities Seek Help Finding Relatives of Deceased Fresno Man

DON'T MISS

Valley Crime Stoppers’ Most Wanted Person of the Day: Felecia Johnson

DON'T MISS

How in the World Did Fresno End Up on Trump’s Sanctuary Cities List?

DON'T MISS

X Marks the Spot: Bruised Musk Says His Young Son Punched Him

DON'T MISS

PBS Suing Trump Administration Over Defunding, Three Days After NPR Filed Similar Case

DON'T MISS

Loretta Swit, Emmy-winner Who Played Houlihan on Pioneering TV Series ‘M.A.S.H.,’ Has Died at 87

DON'T MISS

San Francisco 49ers Acquire Eagles Edge Rusher Bryce Huff, AP Source Says

DON'T MISS

California Lawmaker Won’t Be Charged After Citation for Suspicion of Impaired Driving

DON'T MISS

California School Awards Dinner at Disneyland Comes With Hefty Price Tag

DON'T MISS

Fresno Police Release Video of Officer-Involved Shooting

UP NEXT

How to Travel Without a Phone

UP NEXT

Explore the Wild Side of Route 66 With These Natural Wonders

UP NEXT

What Travelers Should Know About This Messy Memorial Day Weekend

UP NEXT

The Secret to Restaurant-Style Chicken at Home

UP NEXT

7 Epic Travel Experiences to Book in 2025, According to Travel Experts

UP NEXT

9 National Parks With Scenic Bike Trails Perfect for Kids and Parents

UP NEXT

The TikTok Effect: Viral Videos Create the Next Travel Hotspots

UP NEXT

Give Mom the Gift of a Kitchen-Free Mother’s Day

UP NEXT

National Hummus Day Highlights New Ways to Enjoy an Old Favorite

UP NEXT

Gas Up and Go: These Car Shows Are the Ultimate Road-Trip Destinations

X Marks the Spot: Bruised Musk Says His Young Son Punched Him

8 hours ago

PBS Suing Trump Administration Over Defunding, Three Days After NPR Filed Similar Case

9 hours ago

Loretta Swit, Emmy-winner Who Played Houlihan on Pioneering TV Series ‘M.A.S.H.,’ Has Died at 87

9 hours ago

San Francisco 49ers Acquire Eagles Edge Rusher Bryce Huff, AP Source Says

9 hours ago

California Lawmaker Won’t Be Charged After Citation for Suspicion of Impaired Driving

10 hours ago

California School Awards Dinner at Disneyland Comes With Hefty Price Tag

11 hours ago

Fresno Police Release Video of Officer-Involved Shooting

11 hours ago

Hamas Says It Is Still Reviewing a US Proposal for a Gaza Ceasefire

11 hours ago

1 in 4 US Children Have Parents With Substance Use Disorder, Study Finds

12 hours ago

Oreo Maker Mondelez Sues Aldi, Alleging Grocery Chain Copies Its Packaging to Confuse Customers

12 hours ago

Authorities Seek Help Finding Relatives of Deceased Fresno Man

The Fresno County Sheriff-Coroner’s Office is asking for the public’s help in locating family members of a Fresno man who died last month. F...

6 hours ago

The Fresno County Sheriff-Coroner’s Office is seeking the public’s help to locate the family of Felipe Pech, 68, of Fresno, who died on April 23, 2025. (Fresno County SO)
6 hours ago

Authorities Seek Help Finding Relatives of Deceased Fresno Man

Felecia Johnson is Valley Crime Stoppers' Most Wanted Person of the Day for May 30, 2025. (Valley Crimes Stoppers)
7 hours ago

Valley Crime Stoppers’ Most Wanted Person of the Day: Felecia Johnson

8 hours ago

How in the World Did Fresno End Up on Trump’s Sanctuary Cities List?

8 hours ago

X Marks the Spot: Bruised Musk Says His Young Son Punched Him

9 hours ago

PBS Suing Trump Administration Over Defunding, Three Days After NPR Filed Similar Case

9 hours ago

Loretta Swit, Emmy-winner Who Played Houlihan on Pioneering TV Series ‘M.A.S.H.,’ Has Died at 87

9 hours ago

San Francisco 49ers Acquire Eagles Edge Rusher Bryce Huff, AP Source Says

10 hours ago

California Lawmaker Won’t Be Charged After Citation for Suspicion of Impaired Driving

Help continue the work that gets you the news that matters most.

Search

Send this to a friend