, 12 tweets, 2 min read Read on Twitter
1) While $TSLAQ has now angered its largest supplier, Panasonic, here's a story of a smaller supplier who will remain anonymous, but got pushed around by $TSLAQ much more viciously. It highlights how $TSLAQ may lose supply relationships here on, especially b/c Pana is now miffed.
2) This Supplier's technical staff flew all the way out to Tesla's Fremont, CA factory and were ready to help with the ramp-up Model 3 production in July 2017, but there were early signs of further delays.
3) This supplier's team is frustrated, as Musk is ordering unexpected design changes while numerous Tesla engineers tasked with interacting with this supplier, choose to leave, one by one. The last-minute design changes cost Tesla an extra $20m in payments to our supplier.
4) Because this supplier has over-allocated resources to Tesla due to the high hurdles set by Elon Musk for the Model 3's ramp-up, a pushed-out order for GM because of this leads to a 13% undershooting of this suppliers sales targets in Q3 of 2017.
5) This was what is now known as the infamous battery pack problem that caused yet another delay in mass-production of the Model 3 at the end of 2017, which, according to this supplier, was largely due to the battery pack's lid not properly closing.
6) It is near year-end of 2017 now. The Model 3 ramp-up is still behind schedule and Tesla is stalling on its commitment to our supplier for an order worth $100m for an extra 100,000 units of battery pack capacity.
7) Our supplier couldn't quite understand why Tesla was ordering 100,000 units of extra battery pack capacity while it had its hands full with what Model 3 lines they already had. I pointed out that Musk touting a 450K order book for the Model 3 at that time.
8) This implies that Tesla, as of mid to late 2017, was still looking to build another 100,000 units/year of Model 3 capacity, despite the delays and production hell it was experiencing with the Model 3 ramp-up.
9) The $100m commitment for out supplier is still in play as of February 2018. Tesla begins to ask our supplier for steep discounts of over 20% for this $100m new contract related to the supply of an additional 100,000 units of annual capacity.
10) Musk's extreme "price-cutting" bent on Tesla's parts suppliers back then is later highlighted by the Wall Street Journal's scoop about Tesla asking for cash rebates from its suppliers.
11) Our supplier says they'll take $80m instead of the originally agreed price of $100m, but can't divulge this in their earnings guidance, as Tesla has left them hanging about whether they'll accept the new deal. Three months later in May, Tesla cancels its contract with them.
12) Thankfully, our supplier never included the big order in their 2018 guidance. They endured lots of stress dealing with Tesla, but are now being inundated with queries from EU car makers and locked a big order from Benz, which will take share from $TSLAQ. Poetic justice
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