Tesla Inc. asked some suppliers to return a portion of its payments to them in an attempt by the electric-car maker to turn a profit, the Wall Street Journal reported, citing a memo sent to a supplier last week.
Telsa took another financial hit on Monday, with shares in the company dropping nearly 5% after the electric automaker was reported to have asked some United States suppliers to return payments to the money-losing company.
When asked by WSJ, Tesla denied the memo, however confirmed it is seeking price reductions from suppliers for projects, some of which date back to 2016, and some of which haven't been completed.
Analysts say asking suppliers to retroactively give money back is a troubling sign - one that pushed Tesla's stock down 3.3 percent Monday.
The refund request applies to money that Tesla has paid to some suppliers since 2016, according to the Journal.
"Automakers often have brutal pricing demands on suppliers for future work, but retroactive rebates is not something we hear much about, and this is troubling for us to hear", David Whiston, an analyst with brokerage Morningstar wrote in a note to clients.
Tesla is spending about $1 billion a quarter as it ramps up manufacturing of the Model 3 sedan, a lower-priced auto that is key to Tesla's plans of becoming a major mass-market automaker.
FILE PHOTO: A row of new Tesla Model 3 electric vehicles is seen at a parking lot in Richmond, California, U.S. June 22, 2018.
An analyst at Baillie Gifford, Tesla's third-largest institutional shareholder, told the Journal the firm is "divided" on whether Musk is the right leader for Tesla.
While certainly an ambitious goal given Tesla's history, there's reason to believe that Musk's promise might actually pan out.
The latest bad news came after the entrepreneur got into a confrontation with Vernon Unsworth, a British cave diver who helped rescue a team of Thai soccer players from a system of flooded caves.