Reuters / Mike Blake
- A French metal supplier says Tesla hasn’t paid for $1.7 million in parts.
- Lebronze alloys filed a lawsuit for the overdue payments in court on Tuesday.
- It’s not the first time suppliers have said Tesla has balked on agreements.
- Tesla did not respond to a request for comment from Business Insider.
- Visit Business Insider’s homepage for more stories.
Tesla owes roughly $1.77 million in overdue payments, a French metal supplier alleged in a new lawsuit filed Tuesday.
According to court documents, Lebronze Alloys has supplied a metal part for Tesla’s electric motors since 2016. However, efforts to collect the €1,559,420.06 (approximately $1,768,460.32) that the company owes have been unsuccessful, the company said in the lawsuit.
"LBA made numerous efforts to get Tesla to pay the amounts Tesla owed to LBA. LBA convened meetings, sent e-mails and letters, and initiated numerous telephone calls in an effort to get Tesla to pay what it owed, to answer any questions Tesla may have had, and to resolve any issues," the lawsuit, filed in California’s Northern District reads. "In addition, LBA demanded reasonable assurances of performance by Tesla."
In 2016, Tesla agreed to buy parts from LBA for up to 1.5 million vehicles, according to contracts filed as exhibits in Tuesday’s suit. That agreement was amended in February 2019, with the forecast trimmed to just 250,000, according to another exhibit.
"On April 17, 2019, Tesla, without notice, requested an immediate telephone conference call, during which Tesla purported to give verbal notice of termination of the Agreement and the Amended Agreement, without advance notice and contrary to the terms of the Agreement and the Amended Agreement," the lawsuit says. "This constituted a breach, repudiation and anticipatory breach of the Agreement and the Amended Agreement."
LBA is asking the court to force Tesla to pay for the overdue charges, as well as reimbursement for its legal fees and other damages.
Tesla did not respond to a request for comment from Business Insider.
It’s not the first time Tesla suppliers have been unhappy with Elon Musk’s electric automaker. The Wall Street Journal reported in July 2018 that Tesla had sent a memo to suppliers requesting refunds. The memo reportedly stated that the cashback was "essential to Tesla’s continued operation."
Later that year, in August 2018, 18 of 22 executives at automotive supply companies said in a survey reported on by the Wall Street Journal that Tesla was a financial risk to their businesses. Eight of the 22 said they were worried about a Tesla bankruptcy.
Tesla’s cash situation has come back into the forefront of investors’ minds again recently, as disappointing delivery numbers and quarterly earnings reports have sent the stock cratering to less than $200 per share.
Shares of Tesla fell about 1% in after-hours trading on Tuesday following news of the lawsuit.
Read the full lawsuit below:
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