Economy

Tesla shares plummet after reportedly asking suppliers for cash rebates

Tesla shares plummet after reportedly asking suppliers for cash rebates

The electric carmaker reportedly asked select suppliers to return part of the money it paid them for past work to help the company reach profitability, the Wall Street Journal reports.

Initially, Tesla shares dropped by more than 5% on Monday morning as investors responded to the report, although they recovered some ground later.

"Only costs that actually apply to Q3 & beyond will be counted", Tesla CEO Elon Musk said on Twitter in response to the report.

Supply-chain consultants told the paper that sometimes automakers will demand a reduction in price for a current contract going forward or use leverage of the promise of a new deal to get upfront savings.

Tesla had about $3.2 billion in cash as of the first quarter ended March 31, after spending about $1 billion in the quarter.

More news: Israelis demand equal gay surrogacy rights

Tesla is pushing to improve its financial position as it spends heavily to boost production of its latest vehicle, the Model 3. Analysts say Tesla needs to sell a lot more cars.

Tesla has said the company will be profitable in the third and fourth quarters of the year.

Shares in electric auto maker Tesla dipped after reports it asked suppliers for a cashback to become profitable on paper. He had been modeling for Model 3 deliveries around 1.1 million units, and such reduced his volume estimates over a 10-year period by about 42%. The ambitious goal will mean Tesla remains in what is called "production hell" for some time longer.

Tesla was trading below $300 per share at the opening bell on Wall Street, losing over $2.3 billion off its market capitalization.


  • Leadsom Says EU Risks Forcing UK Toward No-Deal Brexit

    Leadsom Says EU Risks Forcing UK Toward No-Deal Brexit

    Barnier also recalled that 13 weeks left to prepare the agreement on the Brexit manner to the next summit of European Union scheduled for October.

    Blow for Team Sky as Gianni Moscon disqualified for hitting another rider

    The Italian was suspended by Sky for six weeks after he admitted to racially abusing Kevin Reza at last year's Tour de Romandie. The jury found this to be sufficient evidence to exclude Moscon from the race.
    Molinari survives wild day to win British Open

    Molinari survives wild day to win British Open

    There were contrasting emotions for the four guys who finished closest to Molinari. "I just didn't make a putt today". Former Gophers golfer Erik van Rooyen shot a 2-over 73 on Sunday and finished tied for 17th place at -2.
  • Heatwave kills 30 people in sweltering Japan's record-breaking temperatures

    Heatwave kills 30 people in sweltering Japan's record-breaking temperatures

    The morning low in Seoul was 29.2 degrees, the highest-ever in the country's capital, according to South Korea's weather agency. Ms Koike also cited traditional ways of cooling in Japan, such as hanging straw screens and spraying water on road surfaces.
    SpaceX launches Block 5 version Falcon 9 rocket

    SpaceX launches Block 5 version Falcon 9 rocket

    The successful mission kicked off what's expected to be a rapid-fire series of three liftoffs in two weeks' time. The Telstar 19V satellite deploys into orbit from the second stage of a SpaceX Falcon 9 rocket on July 22, 2018.
    Bottas says he 'understands' Mercedes team order decision

    Bottas says he 'understands' Mercedes team order decision

    Vettel banged his fists against the steering wheel and shouted over the radio: 'F*** sake, f*** sake. Vettel will now attempt to chase down Hamilton's lead as Formula 1 heads to Hungary next weekend.
  • Federal Bureau of Investigation  misled court when it spied on my aide

    Federal Bureau of Investigation misled court when it spied on my aide

    DOJ releases 400 pages of documents related to Carter Page FISA warrant; Alan Dershowitz weighs in on 'Sunday Morning Futures'. The release of the document is noteworthy as it marks the first public disclosure of a highly sensitive FISA request.
    Jose Mourinho responds to Martial wanting to leave Manchester United

    Jose Mourinho responds to Martial wanting to leave Manchester United

    The youngster also lost his spot in the French side that won the World Cup in Russian Federation this summer. European sides like Juventus and Bayern Munich are keen on the winger.
    Grandfather arrested after toddler shot dead by 4-year-old cousin

    Grandfather arrested after toddler shot dead by 4-year-old cousin

    When first responders arrived, they confirmed the toddler had been shot, Bachman said. It was not immediately known how the boy got hold of the gun, according to Bachman.
  • SA to witness longest lunar eclipse of the century this week

    Australia will be treated to a Blood Moon and a total lunar eclipse, as the Earth passes between the Sun and Moon, this weekend. The lunar eclipse will last for one hour and 43 minutes with total viability in Eastern Africa and Central Asia on July 27.
    Open champion Francesco Molinari pays tribute to ‘sporting’ Tiger Woods

    Open champion Francesco Molinari pays tribute to ‘sporting’ Tiger Woods

    Another clean round on Sunday allowed him to make the most of slip-ups from his rivals, including his playing partner Woods. His charge was a 2-under 69 in the strongest wind of the week, the only player from the last four groups to break par.
    I gave up 'nothing' in Russia summit

    I gave up 'nothing' in Russia summit

    But top US intelligence officials and members of Congress have said they do not know what was discussed and have not been briefed. Special Counsel Robert Mueller is still investigating potential collusion between Russian Federation and Trump's campaign.