Uh-oh........... ________________________________________________ The Wall Street Journal Tesla asks suppliers for refunds to help it become profitable Published: July 22, 2018 7:42 p.m. ET Request raises questions about Tesla’s ability to sustain operations Reuters Tesla Inc. will release second-quarter earnings on Aug. 1. By TimHiggins Tesla Inc. has asked some suppliers to refund a portion of what the electric-car company has spent previously, an appeal that reflects the auto maker’s urgency to sustain operations during a critical production period. The Silicon Valley electric-car company said it is asking its suppliers for cash back to help it become profitable, according to a memo reviewed by The Wall Street Journal that was sent to a supplier last week. Tesla TSLA, -2.08% requested the supplier return what it calls a meaningful amount of money of its payments since 2016, according to the memo. Read: Tesla earnings: Investors should gear up for more drama The auto maker’s memo, sent by a global supply manager, described the request as essential to Tesla’s continued operation and characterized it as an investment in the car company to continue the long-term growth between both players. While Tesla said in the memo that all suppliers were being asked to help it become profitable, it is unclear how many were asked for a discount on contracted spending amounts retroactively. Some suppliers contacted about the request said they were unaware of such a demand. Tesla declined to comment on the specific memo. But it confirmed it is seeking price reductions from suppliers for projects, some of which date back to 2016, and some of which final acceptance many not yet have occurred. The company called such requests a standard part of procurement negotiations to improve its competitive advantage, especially as it ramps up Model 3 production. An expanded version of this report appears on WSJ.com.
A good manager does not need refunds, he negociates from start a good price. Musk is in survival mode that is clear now. When he almost had to sell Tesla to Google nobody knew about it too. Will history repeat itself? Wait till the REAL carmakers will start selling end of 2018... The real problems for Tesla will start then.
I'm sticking with the call. 296.71 Edit $271 stop, 1% equity @ risk using volatility based position size.
Here is what I think happening with those 2 groups of cars baking in the sun in 2 different locations in CA: "I think they built them in batches, could not ship them out of Fremont because they were not staged properly, and now have to re-batch them to geographical areas based on the orders. My question is whether they built in batches and called 'cars in transit' cars which really did not have a true buyer yet. Just assumed they would unload them all when they opened up configuration to everyone. They did a similar thing with the X in smaller scale and called customers and said 'we don't have the blue that you want but if you want a silver, you can have it tomorrow'- as an example." For easier logistic of the production, they prebuilt them without a buyer...
Another version: "I'd be hiring every shipping company I could lay hands on to get those cars out of there. That's a lot of potential revenue just sitting there, baking in the sun, getting their touch screens heat warped and drying out the cheep leather causing it to crack. There is only about three explanations that make sense. 1) There is no demand for what ever version this is. 2) Management is completely incompetent at asset control and CNS, and logistics. 3) The cars are not fit for consumption because either a part is missing, they need massive re-work or something else. Of course it could be a combination of all three." ------------------------------ For fun: http://www.muskfoundation.org
Concerning the $1,000. deposits and the $2,500. "payments"...When does it become grand theft if you know you can't deliver?? Who do you charge with the crime?? Here is the definition in California. The crime of theft in California law is defined as the unlawful taking of someone else's property. And when the property taken is valued at more than nine hundred fifty dollars ($950), then the theft is considered the California crime of grand theft under Penal Code 487 PC. Maybe I'm wrong...They gave it willfully?? Unless Tesla knew something. Wondering if the 2nd quarter earnings/loss will use the words "going concern" to cover their backside... I think I'm wrong...Should be fraud. (a) Every person who shall feloniously steal, take, carry, lead, or drive away the personal property of another, or who shall fraudulently appropriate property which has been entrusted to him or her, or who shall knowingly and designedly, by any false or fraudulent representation or pretense, defraud any other person of money, labor or real or personal property, or who causes or procures others to report falsely of his or her wealth or mercantile character and by thus imposing upon any person, obtains credit and thereby fraudulently gets or obtains possession of money, or property or obtains the labor or service of another, is guilty of theft. In determining the value of the property obtained, for the purposes of this section, the reasonable and fair market value shall be the test, and in determining the value of services received the contract price shall be the test.
What is a little fraud between friends? Edit: these are not Tesla's concessions, those are plaintiffs arguments, but still....