Tesla Inc. (NASDAQ: TSLA) tumbled on Monday, after the Wall Street Journal reported that the electric vehicle maker has asked suppliers to refund a portion of previous payments to help the Company become profitable.
According to a memo review by the newspaper, Tesla requested all its suppliers to return a meaningful amount money from its previous payments since 2016. It is unclear the number of suppliers that were asked to be refunded.
Tesla did not immediately leave a comment on the memo.
The report raised investors’ concerns on Tesla’s cash position. According to the Wall Street Journal, Tesla burned about USD 1 Billion a quarter. Many analysts expected it need to raise more money to maintain its mass production of Model 3.
Tesla has been struggling to produce and deliver Model 3. But it reached its target of producing 5,000 Model 3s in a week last quarter.
Tesla’s recent moves show that the Company want to avoid additional fund gathering. Tesla cut about 9% of its workforce in June to lower capital expenses. Chief Executive, Elon Musk, has expected the Company will become profitable in the second half of the year.
Tesla shares fell more than 5% below USD 300 in the early trading on Monday. However, it erased some of its loss later and is trading at about USD 303 at midday.