From WSJ: Tesla asking suppliers for refund/cash to become profitable

[gambit48]

It's an optics thing. Asking for concessions from suppliers for future deals, even starting immediately, is normal. Expected even.

Asking suppliers for PAST monies is what's weird. It's not the norm. And with Tesla's known cash problems, the optics of it look pretty bad. Of course it would be a good thing for Tesla if the suppliers agreed. They wouldn't ask if it wouldn't help cash flow. The optics and what it means for people trying to analyze and project Tesla's performance and future don't make it a good look.

 

[Tdriver]

Some shorts will find a way to make this look bad for Tesla.

 

[Boomer19]

some background on supply chain negotiation
How to Negotiate with Powerful Suppliers

 

[W84M3]

Cross posting: Statement from Tesla

 

[Unpilot]

Wow. And hope of getting a model 3 before the doors close?

Welcome to a few hours ago....try and keep up.

 

[vinnie97]

Not to be a pedant, but this thread was posted a few hours ago.

 

[Boomer19]

Cross posting: Statement from Tesla

right on cue
see post prior to yours.
sounds logical to me.

 

[Barklikeadog]

The optics on that is so bad...what the hell is Tesla thinking? I hope Elon has an ace up his sleeve. Stock getting killed.

Its a legit story and I'm getting disagreed :/ BARK stock is taking a hit today.

 

[MXWing]

OP is showing "caring and concern" for the Tesla enthusiasts.

 

[jelloslug]

 

[jelloslug]

Its a legit story and I'm getting disagreed :/ BARK stock is taking a hit today.

It's a FUD story that was spun to make the stock slide.

 

[commasign]

Official statement from Tesla as reported by CNBC:

“Negotiation is a standard part of the procurement process, and now that we’re in a stronger position with Model 3 production ramping, it is a good time to improve our competitive advantage in this area. We’re focused on reaching a more sustainable long term cost basis, not just finding one-time reductions for this quarter, and that’s good for Tesla, our shareholders, and our suppliers who will also benefit from our increasing production volume and future growth opportunities. We asked fewer than 10 suppliers for a reduction in total capex project spend for long-term projects that began in 2016 but are still not complete, and any changes with these suppliers would improve our future cash flows, but not impact our ability to achieve profitability in Q3. The remainder of our discussions with suppliers are entirely focused on future parts price and design or process changes that will help us lower fundamental costs rather than prior period adjustments of capex projects. This is the right thing to do."

Tesla shares drop after carmaker reportedly asks its suppliers for refunds to reach profitability

Makes sense to me. The clickbait titles today are just more of the same FUD we’ve been seeing.

 

[eSpiritIV]

Two model 3 tear downs estimate 25-30% gross profit margin, even more for performance model. Discount from suppliers on top of this. Chaching! All suppliers and Tesla are in symbiosis and want to succeed together, and will give a discount and make Tesla and them more money over the next decade

 

[adaptabl]

Its a legit story and I'm getting disagreed :/ BARK stock is taking a hit today.

Just on the last line.

 

[Economite]

Frankly, the references here to CapEx projects that began in 2016 but are not complete worries me a bit. Sounds like this isn't really suppliers that Tesla is holding up, but contractors installing/providing parts of the plant itself. So what Tesla is doing is demanding a discount on a construction project that is already underway; probably with an implicit threat that they will play games with final payments if the contractor doesn't play ball. How is this different from the way Trump is reputed to commonly stiff his contractors?

 

[jelloslug]

Frankly, the references here to CapEx projects that began in 2016 but are not complete worries me a bit. Sounds like this isn't really suppliers that Tesla is holding up, but contractors installing/providing parts of the plant itself. So what Tesla is doing is demanding a discount on a construction project that is already underway; probably with an implicit threat that they will play games with final payments if the contractor doesn't play ball. How is this different from the way Trump is reputed to commonly stiff his contractors?

The way it reads, it's for projects that should be finished already.

 

[darrelld]

Toyota Asks Suppliers to Cut Prices

Toyota Asks Suppliers to Cut Prices
Hoping to narrow its loses, Toyota approaches its suppliers for help in cutting prices.
Andrea Tse
Dec 22, 2009 11:00 AM EST
Read as Single Page

NEW YORK ( TheStreet) -- In a move to pare down operating losses and cope with a strengthening yen, Toyota ( TM - Get Report) is asking its suppliers to reduce prices for certain parts by as much as 40%, according to reports.

 

[Barklikeadog]

Just on the last line.

That line is sarcasm.

 

[adaptabl]

That line is sarcasm.

O.K. I fixed the rating.

 

[Cheburashka]

On what planet does one ask for a discount on a contract that has already been signed? And at the worst time too. Seems to me like Tesla is desperate to get more cash in their coffers by any means possible..

Didn't Elon say the shorts should be crying this week? Well? We're waiting...