GM Volt Forum banner

1 - 20 of 27 Posts

·
Registered
Joined
·
4,764 Posts
Where have we seen this tried before? Here.
 

·
Administrator
Joined
·
20,198 Posts
I was at the store today as asked them for a meaningful amount of cash back that I spent with them in the past year. They looked at me funny and said no. I told it it would really help my bank account and improve my credit reports. They still said no.
 

·
Registered
Joined
·
5,431 Posts
I cannot read the full article unless i am subscribed, which I will not do.

If Musk needs cash, have him and all the top Tesla brass sell off their properties and stocks first. The suppliers are doing business correctly, and never deserve to be pulled down by Tesla's bad finances. If I were a supplier, and Tesla came to me with this request, I would say no and raise prices! And if Tesla stops paying their bills, I will stop supplying which will probably hold up the manufacturing line.

Edit: I found two more readable articles of the same subject elsewhere:
http://fortune.com/2018/07/23/tesla-suppliers-cash-back-profit/
https://www.usatoday.com/story/money/cars/2018/07/23/tesla-suppliers-refunds-profits/817740002/

From the FORTUNE article: In the meantime, manufacturing consultant Dennis Virag told The WSJ that Tesla’s request shows that it’s “desperate right now,” and that the company is “worried about their profitability but they don’t care about their suppliers’ profitability.”
 

·
Registered
Joined
·
4,405 Posts
There is trick to reading those pay sites, but I forgot it.

Tesla is already very tight with their quoting and AP.
It is unlikely many companies would comply with their request.

This is likely to backfire. Some vendors are going to tighten up their terms, others will quit. I can't imagine a company giving a discount afterwards on a company that's normally haggles on the RFQs, is often a late pay, who has often amateurish blueprints and 3D models.

Perhaps if Tesla wasn't as adversarial with vendors, this might work. But they are sort of a running joke in the mfr'g community.
 

·
Registered
Joined
·
4,011 Posts
There is trick to reading those pay sites, but I forgot it.
Use Chrome. Open troublesome links in Incognito mode. Most paywalls give up at that point because they can't tell whether blocking you is going to screw up their SEO program or not without having access to IP tracking logs, and that's a lot of load on a webserver that doesn't have much overhead to spare.
 

·
Registered
Joined
·
485 Posts
While I am generally unsympathetic to Tesla creating problems for itself by overpromising (which it does often), this article screams of a speculative short-seller trying to create negative press.

It is not unprecedented, or even a bad idea, for a company in Tesla's position to effectively ask for a short term loan from its suppliers to offer significant protection to a potential long-term business relationship for these suppliers.
 

·
Registered
Joined
·
4,405 Posts
While I am generally unsympathetic to Tesla creating problems for itself by overpromising (which it does often), this article screams of a speculative short-seller trying to create negative press.

It is not unprecedented, or even a bad idea, for a company in Tesla's position to effectively ask for a short term loan from its suppliers to offer significant protection to a potential long-term business relationship for these suppliers.
If they are asking for a credit for closed POs, or discount on open POs, this will generate profit. If they are asking for longer terms on AP, it only increases cash on hand, but does not affect profits much if at all.

It is not unheard of for a company to request or demand longer AP terms.

We tell them no. Terms were established at the outset. In fact we put them on the Hot List. These are the customers we aggressively collect from. 1 day late gets a call. 1 week late, and we stop quoting further work. 1 month late, and they go COD.

If they are asking for rebates on past closed POs? This is a news story. It might happen, but I've never heard of it. At best, companies will ask for lower per unit price on future orders. But a closed PO is just that. Closed.

It would be like me asking for more money for a job that was completed, billed, and paid. "Can you give some more money for that last job you already closed?"
 

·
Registered
Joined
·
44 Posts
Musk did comment on Twitter that it only from Q3 onwards and justified by the now stable high volume of deliveries.
 

·
Registered
Joined
·
4,405 Posts
If Ford came up to you a year later, and said "We are now doing great, will you give us $5000 more for the car you bought last week from us?" which finger would you answer with.

This is so highly unusual for a company to do that is not in serious danger of insolvency as to be unbelievable. But apparently it's in print. The memo was sent to vendors and acknowledged.
 

·
Registered
Joined
·
248 Posts
Use Chrome. Open troublesome links in Incognito mode. Most paywalls give up at that point because they can't tell whether blocking you is going to screw up their SEO program or not without having access to IP tracking logs, and that's a lot of load on a webserver that doesn't have much overhead to spare.
Edge also works using an InPrivate mode browser session.
 

·
Registered
Joined
·
4,405 Posts
The net effect of this (if true) will be vendors quoting higher prices and shorter terms across the industry when dealing with TSLA.

Tesla already has less than stellar reputation in the subcontracting community. Hearsay - the door handle fiasco left one vendor holding the bag for a large order that was made per blueprint tolerances, but did not work reliably. Instead of doing the right thing, Tesla redesigned the part, and sent it to another vendor, I believe in China.
 

·
Registered
Joined
·
44 Posts
It's more like "we can now guarantee you steady high demand, will you check your pricing accordingly?" from what I understand.
 

·
Registered
Joined
·
4,405 Posts
My opinion remains that Tesla cannot sell the Model 3 LR / PUP with all the AP/FSD hardware pre-installed for $50,000 and turn a profit.

If I'm right, the large sales numbers are more of a danger to TSLA's profitability than an asset. This would explain the jump to the Performance edition far ahead of schedule and opening sales to everyone at once.

If the 3LR was profitable, they should have shipped 3LR's to LHD Euro buyers instead of holding them.

Don't get me wrong, the 3LR is a great value for the money, as is the 3 Performance. But profitability isn't purely parts costs.
 

·
Registered
Joined
·
4,405 Posts
It's more like "we can now guarantee you steady high demand, will you check your pricing accordingly?" from what I understand.
That would be normal in the industry and not news. Happens constantly in all sectors, even service sectors.
 

·
Registered
Joined
·
44 Posts
The more you have produced, the lower the unit cost becomes. The same applies to every part, not just to those built in-house.
 

·
Registered
Joined
·
4,405 Posts
The more you have produced, the lower the unit cost becomes. The same applies to every part, not just to those built in-house.
What I think must be going on, is that vendors quoted based on smaller quantities, and were paid.

Now, Tesla wants lower unit pricing on larger quantities AND a credit down to that number for units already shipped and paid for.

Why?

A rebate for past quarters amends that quarter not the current quarter when it comes to profits. However, if you roll the discount into present orders, then you can show it as a profit, since it's a new PO, not one from a previous quarter.

It all works out the same in the end, it just pumps up the current quarter instead of a past quarter.
 

·
Registered
Joined
·
44 Posts
I don't know what is going on, but Musk tweeted yesterday that this strictly a Q3 issue contrary to what has been reported.
 

·
Registered
Joined
·
11,416 Posts
I don't know what is going on, but Musk tweeted yesterday that this [is] strictly a Q3 issue contrary to what has been reported.
No, that is what's being reported. Musk could post covfefe on Twitter and it would be reported within minutes.

TSLA is down on the news. It's being taken as an artificial method of attempting to show black ink.
 

·
Registered
Joined
·
4,405 Posts
Some folk naturally assumed that the Model 3 inventory buildup and delay was due to the 200,000 Rebate point.

What if it was just to incur more costs in Q2 and show more sales in Q3? It just happened to be coincidence the 200,000 point was in that area. Nobody from Tesla or IRS has said definitively when Tesla crossed the 200k barrier.
 
1 - 20 of 27 Posts
Top