Hard to imagine the world’s most successful electric car-making business was near bankruptcy only a little more than a year ago. Tesla CEO Elon Musk, via Twitter on Tuesday, said his company was “about a month” from bankruptcy due to the uncertainty over how to mass produce the Model 3 electric sedan.
When asked by a follower how close was Tesla from bankruptcy, Musk replied, “Closest we got was about a month. The Model 3 ramp was extreme stress & pain for a long time—from mid-2017 to mid-2019. Production & logistics hell.”
A Fox Business story on Wednesday said Musk didn’t offer specifics, but the company was profitable for only two quarters between September 2016 and September 2019. Musk spent time sleeping at the company’s Fremont, Calif., factory to oversee operations during the period.
Tesla struggled to make money selling the Model 3, its cheapest electric car at $35,000 and couldn’t produce consecutive profitable quarters.
Musk’s Twitter exchange was initiated following a reference to the 12-year anniversary of a $40 million loan his then-private company secured in 2008 to avoid bankruptcy. He said that money covered six months of operations and that, five months later, auto corporation Daimler added $50 million that further stabilized Tesla.
Musk cited raising money as “extremely difficult” at the time and that he put all his money into the business, “even though I thought we would still fail.” The company had to lay off 18% of its workforce. What a difference 12 years makes.
Tesla stock was trading at $423.26 Wednesday a few hours before the closing bell, giving it a market cap over $400 billion and, according to the Fox Business story, making it worth more than Toyota, Volkswagen, GM and Ford combined.