Some Tesla suppliers now worry about getting paid
Tesla Inc.’s tumultuous year has fueled concern among some of its suppliers about the auto maker’s financial strength after production of the Model 3 car drained some of its cash, according to industry executives and documents.
A recent survey sent privately by a well-regarded automotive supplier association to top executives found that 18 of 22 respondents believe that Tesla TSLA, +0.96% is now a financial risk to their companies, according to the document reviewed by The Wall Street Journal.
Read: Tesla stock battered afresh as JP Morgan joins deal doubters
Separately, several suppliers in interviews said Tesla has tried to stretch out payments or asked for significant cash back. And in some cases, public records show, small suppliers over the past several months have claimed they failed to get paid for services supplied to Tesla.
Tesla has improved its on-time payments to production-related suppliers to about 95% from 90% last year, according to people familiar with the matter. For nonproduction suppliers, Tesla is paying on time about 80% of the time, the people said. “We’re not behind because we can’t pay them,” Tesla Chief Executive Elon Musk said in an interview Friday. “It is just because we’re arguing whether the parts are right.”
An expanded version of this report appears on WSJ.com.
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