Tesla is reportedly asking some of its suppliers for discounts on parts it already purchased

The company states that this is a normal business practice, but some consultants disagree

Tesla Model 3 on road

Tesla has been all over the place lately.

One week the company is hitting its production goals and the next it’s losing more pre-orders that it’s gaining. Now the company is asking its supply partners for discounts on products it’s already bought.

The Wall Street Journal is reporting that the electric car company is asking for retroactive discounts from some of its suppliers.

There is speculation that the company is doing this to make back money in an effort to ensure its financial position looks better in the next quarter, but the company has stated to Engadget that “any changes with these suppliers would improve our future cash flows, but not impact our ability to achieve profitability in Q3.”

In a memo that was sent from a global supply manager to some of its suppliers, Tesla claims that the discounts are necessary to help the company continue to operate. Tesla says suppliers should view this as an opportunity to invest in the automaker.

Tesla confirmed to The Wall Street Journal that it’s seeking these discounts on various projects. The company also said that these types of deals are standard in large scale negotiations. Consultants are saying the opposite is true and that it’s very rare to ask for discounts after goods have been paid for.

In a statement from Tesla to Engadget, the car company stated, “Now that we’re in a stronger position with Model 3 production ramping, it is a good time to improve our competitive advantage in this area. We’re focused on reaching a more sustainable long-term cost basis, not just finding one-time reductions for this quarter, and that’s good for Tesla, our shareholders, and our suppliers who will also benefit from our increasing production volume and future growth opportunities.”

The automaker also clarified that it asked less than 10 suppliers for these discounts.

Source: The Wall Street Journal, Engadget