Tesla responded to reports Monday that it asked suppliers to refund money already spent, saying the requests were made on ongoing, long-term projectsーnot on contracts that were already complete.
That response came in reaction to a Wall Street Journal story which sent shares down as much as 6.6 percent in early trade.
According to a memo obtained by the Journal, a global supply manager at Tesla asked for cash back on purchases from as long ago as 2016, saying refunds were necessary for the company to remain viable and to ensure both it and the parts maker could grow.
Tying the suppliers' fortunes in with Tesla's could help persuade them, said Tim Higgins, the technology and automotive reporter at the Wall Street Journal who broke the story, even if they feared renegotiating would set a bad precedent.
"If you're concerned about a company going forward, you want to help them make it through a difficult patch. There's also the idea of, well, maybe there's bigger business down the road. Those sorts of inputs go into the calculation," Higgins said in an interview with Cheddar.
Tesla's attempt to get price cuts demonstrates the company's tenuous position as it looks to ramp up production, especially of its latest Model 3, in the face of a dwindling cash stockpile. Hitting a sustained production rate of 5,000 of those vehicles a week ー a goal the company met for the first time in the last week of the second quarter ー is seen as crucial for eventually helping the company become cash flow positive.
CEO Elon Musk has said the company won't need to raise more funds, but Tesla has been burning through about a billion dollars in cash a quarter and, at the end of March, had $2.7 billion left on its balance sheet.
Cash flow will be the focus of Tesla's second quarter earnings on August 1.
"Analysts almost universally agree that Tesla's going to need to raise more money and likely has the ability to do it," said Higgins. "It's that the CEO doesn't want to do it, and that is creating some of the pressure here."
For the full interview, [click here](https://cheddar.com/videos/teslas-showing-signs-of-desperation).
Donald Trump began testifying Monday morning in his civil fraud trial, producing the spectacle of a former president and the leading Republican presidential candidate defending himself against allegations that he dramatically inflated his net worth.
The trial between Google and the maker of the game Fortnite will begin Monday as a San Francisco jury will hear Epic Games' case claiming the Google Play Store takes an unfair commission on purchases made through apps.
One of the most self-made and success stories in the country, Emma Grede, has worked along with the Kardashian Jenner family on many of their best-known brands. Grede, CEO and co-founder of Good American, gave back to the next generation of business leaders as a featured speaker at the Chase for Business Make Your Move summit last week. She spoke with Cheddar News about her career, her company's fashion brand, working with the famous Kardashian-Jennifer family and balancing her own family life.
Berkshire Hathaway, the conglomerate run by businessman Warren Buffett, reported its operating earnings in its most recent quarter jumped more than 40% from a year ago but posted its first net quarterly loss in a year.
Elon Musk's company XaI has announced a new chatbot called Grok.
SAG-AFTRA said over the weekend that it received the studios' last best and final offer following a meeting on Saturday, with the union saying it's reviewing it and considering a response "within the context of the critical issues addressed in our proposals."
Stocks rose slightly as Wall Street looks to continue its momentum with earnings season winding down.
Tyson Foods is recalling about 30,000 of its dino-shaped chicken nuggets after some consumers reported finding small metal pieces in those nuggets.
Google on Monday will try to protect a lucrative piece of its internet empire at the same time it’s still entangled in the biggest U.S. antitrust trial in a quarter century.
Before the SAG-AFTRA strike, this was the weekend “Dune: Part Two” was supposed to open. When Warner Bros. and Legendary pushed that opening back to March 2024 and no other blockbuster stepped in to take its spot.
