Tesla reportedly asks for money back on payments to suppliers

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Tesla declined to comment on the memo, but did confirm that they have been seeking price reductions from suppliers for their recent projects.

Chief executive and top shareholder Elon Musk has said that Tesla intends to become profitable in the second half of 2018, and analysts said Monday that the memo is an attempt to meet that goal.

After the memo was leaked over the weekend, Musk tweeted: "Only costs that actually apply to Q3 & beyond will be counted". The 15-year-old company has reported only two quarterly profits in its history and has never made a profit for a full year.

That's what analysts worry about with Tesla, which has asked suppliers to return a portion of payments for parts they've delivered going back to 2016. The plea is said to have been framed as a way to help Tesla achieve profitability.

This development comes at a critical time as the company is struggling to boost production of its first mainstream model, the Model 3.

Tesla is due to report second-quarter earnings after the stock market closes on August 1.

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The remainder of our discussions with suppliers are entirely focused on future parts price and design or process changes that will help us lower fundamental costs rather than prior period adjustments of capex projects.

The leak comes as Musk continues to unnerve investors, with Tesla shares falling from a year high of US$370 in mid-June to around US$301 on Monday.

Even though Tesla is making more of the sedans, the company won't complete delivery and collect revenue for many of them until the third quarter, Whiston said.

Tesla hit its goal of producing 5,000 Model 3 sedans, the vehicle widely seen as its path to profitability, on July 1.

The cost of insuring $100 of Tesla debt hit $6.58 around 10:30 am Tuesday, according to data from Bloomberg, amid fresh fears over Tesla's cash position.

Tesla's share price is now down 4.22 per cent, after hitting a low of 4.3 per cent in pre-market trading this morning. Musk marked the occasion by saying the milestone finally made Tesla "a real company".

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