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People in the industry who work with Tesla and his suppliers say suppliers are bracing themselves for pressure from Elon Musk, Tesla's chief executive, and his team for further price cuts. Prior to this, Tesla announced a sharp reduction in product prices in the wake of the macroeconomic downturn.

Suppliers see what Zack Kirkhorn, Tesla's chief financial officer, said last month as a bad omen. He said at the time that Tesla was "targeting all sources of cost", including the supply chain, and would work closely with suppliers. On the Tesla earnings call last week, Mr Musk said the recession could lead to a significant drop in almost all cost inputs.

Dan Sharkey, a lawyer representing Tesla and other car suppliers and co-founder of Brooks Wilkins Sharkey & Turco, a law firm, said: "the price cuts of automakers have never been good for suppliers, which will pass the pressure on to suppliers. But there is no room here because many suppliers are already struggling financially."

Most of Tesla's suppliers, including battery makers Panasonic, LG New Energy and Ningde Times, as well as Italian foundry maker IDRA Group, have avoided public discussion of Tesla, citing confidentiality agreements.

Tesla's sharp price cuts last month prompted competitors such as Ford to follow suit. The price cut is likely to affect Tesla's profit margin, which was previously the highest in the industry.

Although it is nothing new for suppliers to face pressure to cut prices, an executive at one supplier, who spoke on condition of anonymity, said that during the epidemic, Tesla focused more on product delivery than price. He is even willing to pay higher prices to get parts and components supplied more quickly. He is worried that Tesla's remarks on the earnings call last month may be a sign that things are changing.

Tesla did not comment on the supplier's situation.

Although Tesla and other automakers priced their products at higher prices and had strong profit margins during the outbreak, suppliers were unable to fully pass on higher costs, so profit margins fell, according to a study by Bain, a consultancy. In the third quarter of last year, carmakers' profit margins were nearly 3 per cent higher than those of suppliers.

Industry insiders say further price cuts could have a bigger impact in industries where suppliers are already in trouble.

Gissing North America, a Michigan-based company that provides car audio systems and tops, once regarded Tesla as its biggest customer, but filed for bankruptcy last year. Stephen Weber, the company's chief restructuring officer, said the bankruptcy was partly due to high labour costs and commodity prices. "I think some problems will be alleviated, but the labor problem will not be solved soon, or maybe never," he said. because it's an inherent factor that affects the prices of all goods. "

Shaki, a lawyer who represents suppliers, said: "suppliers are not public welfare organizations, they need to make money." if they lose money, they will be in financial trouble. "

Industry insiders say Mr Musk may take steps to reassure suppliers, such as using larger shipments to make up for losses caused by price cuts.

However, due to the rising cost of raw materials, some suppliers are raising prices. NXP Semiconductor said on Tuesday that it would raise the price of its products because of its high cost input. NXP did not disclose itself as a supplier to Tesla, but analysts said the dismantling of Tesla showed that NXP was also supplying Tesla.

Kurt Sievers, chief executive of NXP, said on Tuesday: "frankly, we don't have much resistance from the car companies."

A former Tesla executive said Tesla could "share" efficiency, negotiate with suppliers to reduce costs, or simply put pressure on suppliers to grab profits. "now Tesla will do what other automakers have been doing for decades."

However, people in the industry believe that Tesla will face resistance. "Tesla will encounter a strong backlash from suppliers," said Laurie Harbour, an industry consultant who works with multiple suppliers.

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