When a company asks suppliers to retroactively give money back, it's a sign that something has gone wrong.
That's what analysts worry about with Tesla Inc., which has asked suppliers to return a portion of payments for parts they've delivered going back to 2016. In the memo to suppliers last week, Tesla asked for a meaningful amount of money to help it become profitable. The electric-car maker made the request to fewer than 10 suppliers, related to capital expenditures for long-term projects that started as far back as 2016 and aren't complete, a spokesman said in a statement.
That move is worrisome because Chief Executive Officer Elon Musk has said that the success of the new Model 3 sedan should pull the perennial money-loser into the black in this year's second half and show positive cash flow. What may be happening is that Tesla spent so much money racing to get its factory to 5,000 Model 3s in a week — while not delivering all of them to buyers yet — that second-quarter numbers are going to look rough and Musk needs a hand from suppliers to shore up the balance sheet until later in the year.