Tesla reportedly asking its suppliers for partial cash refunds to reach profitability

David Paul Morris | Bloomberg | Getty Images

Elon Musk, chairman and chief executive officer of Tesla Motors

Tesla shares are falling on a report the electric car maker has asked some of its suppliers to refund a portion of previous payments made by the company.

On Sunday The Wall Street Journal reported Tesla is requesting its suppliers to give back cash to help the company become profitable, according to a Tesla memo sent to a supplier last week. The memo revealed the carmarker asked for a return of a “meaningful amount of money of its payments since 2016.”

Tesla shares are down 3.4 percent in Monday’s premarket session.

The Wall Street Journal said other suppliers the media outlet contacted said they were not aware of the request.

Tesla did not immediately respond to a request for comment. It is slated to report its June quarter earnings results on Aug. 1, according to its website.

In May Tesla said it expects positive GAAP net income in its third and fourth quarters this year.

The latest report calls into question the state of Telsa’s financial position. The company lost nearly $2 billion last year and burned about $3.4 billion in cash after capital investments. It had $2.7 billion in cash at the end of the March quarter.

See the full Wall Street Journal report here.