FX.co ★ Tesla asks for money back from its suppliers

Tesla Inc., the US leading electric-car company, has asked some of its suppliers to refund a portion of money it has spent over the past two years.

The Californian EV maker sent a memo to some parts suppliers, asking to return a meaningful portion of money spent since 2016. The automaker asks business partners to help boost the joint revenues. The memo, addressed to suppliers, describes a difficult financial situation associated with some production issues.

However, the suppliers were wary of Tesla’s initiative. They believe that automakers often ask to reduce prices not only under current contracts, but also ask discounts on future contracts. All this does not contribute to good relations, experts say.

Earlier, in May 2018, it was reported that Tesla had negative free cash flow for five quarters. The company ended 2017 with $3.4 billion in cash on hand and $9.4 billion in outstanding debt. Analysts emphasize that if Tesla fails to attract additional funding in the near future, it will have no funds by the end of 2018.