Tesla Inc. stock dropped Monday morning after a report that the electric carmaker has asked some suppliers to pay back part of what Tesla had previously spent.
The Wall Street Journal reported Sunday that Tesla asked a supplier to return a slice of the payments the Elon Musk-led automaker had made since 2016. In a memo sent to that supplier last week by a Tesla global supply manager, the Journal reported, Tesla said that the move was essential to its continued operation and that all suppliers were being asked to help the company become profitable.
Tesla shares were down 3 percent at $304.35 about 11:30 a.m. PDT.
Tesla did not immediately respond to a request for comment from The Times, but it confirmed to the Journal on Sunday that it was asking suppliers for price reductions for projects, some of which date back to 2016 and some that hadn't yet been completed. The company declined to comment to the Journal specifically about the memo.
David Whiston, an analyst at Morningstar, said in a note to investors Monday that news of requests for rebates was unusual and "troubling to hear."
"Automakers often have brutal pricing demands on suppliers for future work, but retroactive rebates is not something we hear much about," he said in the note.
Tesla has been focusing on its cash flow recently as it struggles to mass-produce its Model 3 sedan. It faces trouble on a variety of fronts, including manufacturing, quality, logistics, delivery and service.
Earlier this month, Tesla said it had finally reached its production goal of churning out 5,000 Model 3 cars in a week, though its production for the quarter fell short of many analysts' expectations. In June, Tesla said it was laying off about 9 percent of its workforce _ about 3,600 employees _ in an attempt to become profitable.
The company remains far short of its onetime production goal: hundreds of thousands of Model 3s manufactured and delivered in 2018. After crippling automation problems on the main Model 3 assembly line in Fremont, Calif., this year, the company began partial assembly in a tent hastily built on a parking lot outside the factory.
The company also is grappling with automation problems at its giant battery plant in Nevada.
Photographs, videos and images shot by drone and posted on Twitter show thousands of Model 3 cars parked uncovered in large partially unpaved lots outside Stockton and near the Burbank airport. Tesla's media relations department told The Times that's normal industry practice.
But Bill Hampton, editor of industry trade site Auto Beat Daily, said "it's surprising that there would be large quantities of Models 3s laying around. Given the level of demand, you'd think they wouldn't be holding those cars for more than a couple days before shipping them out."
Complaints online are also indicating logistics problems. On Tesla forums, people have recently reported weeks-long delays between paying for their cars and receiving them. (Typically, a Tesla buyer who puts down a deposit expects to pay the balance only when the car is ready to pick up _ a usual practice throughout the auto industry.) Others said they were told they would have to wait weeks but then received their cars immediately. And over the weekend, Twitter users said they had to wait hours to pick up cars at Tesla delivery centers.
Beyond the company's financial issues, Tesla Chief Executive Musk has recently raised eyebrows by tangling with a number of people on Twitter, including a diver who was involved in the rescue of 12 Thai soccer players and their coach. The diver had criticized a mini-submarine developed for the effort by engineers from SpaceX, another company Musk helms.
