Tesla Motors describes canceled order with supplier SHW

Tesla Motors

Tesla Motors stated it canceled a large order with Germany’s SHW because the provider cannot satisfy its contractual obligations and Tesla did not wish to put the production of its new Model 3 sedan at risk.

Tesla CEO Elon Musk has alerted in the past he would fire providers and restructure internal teams who cannot fulfill time frame for production of the upcoming Model 3.

On Thursday Tesla verified it was the customer that canceled a 100 million euros ($107 million) order with SHW and rejected it had anything to do with the Trump administration.

The loss of the order sent out shares in SHW, which assembles pumps and engine parts in addition to brake discs, to a four-month short on Tuesday.

German media reports stated the cancellation arose from political pressure after U.S. President Donald Trump met CEOs, including Elon Musk, on Monday.

Tesla Motors stated the order was canceled due to the fact that the provider’s product did not fulfill its technical requirements.

“Tesla’s policy is to terminate any supplier that is not able to satisfy their contractual milestones or breaches their non-disclosure agreement,” the automaker stated by email on Friday.

“We need to be firm in this regard in order to keep the Model 3 program on schedule and avoid plot spoilers,” Tesla stated.

SHW stated on Tuesday its consumer was disgruntled over the technical requirements for axle-drive pumps which cannot meet its requirements, however SHW stated it did not accept the reason.

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