Tesla was ‘a month away’ from bankruptcy while making the Model 3
Elon Musk has shared some insight into how close the most valuable carmaker came to going under as it fought for profits.
As recently as 2019, Tesla was teetering on the edge of bankruptcy.
The revelation came in the form of a tweet from CEO Elon Musk, who spent part of Election Day interacting with fans on the social network.
Asked by one user how close the company came to Chapter 11 bankruptcy during the ramp-up of production for its Model 3 sedan, Musk said that the “closest we got was about a month”.
“The Model 3 ramp was extreme stress and pain for a long time – from mid-2017 to mid-2019,” he added. “Production and logistics hell.”
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.
— Elon Musk (@elonmusk) November 3, 2020
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During that two-year period, Tesla stumbled from crisis to crisis, from Musk causing controversy for (legally) smoking weed on a podcast to issues manufacturing its Model 3, which the automaker was counting on to bring it to profitability.
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In May 2019, Musk told workers that Tesla was facing an extreme cash crunch, and that “all expenses of any kind anywhere in the world, including parts, salary, travel expenses, rent, literally every payment that leaves our bank account must (be) reviewed.”
Indeed, Tesla did not turn the corner until October 2019. Over the past year, Tesla shares have seen their value increase 540 per cent. With a market cap just shy of $US400 billion ($A557 billion), Tesla is by far the most valuable automaker in the world.
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Musk also briefly touched on his eye-popping CEO compensation package, which last week landed him another $US3 billion ($A4.18 billion), for a total of $US11.8 billion ($A16.4 billion). Though he said that he did not expect Tesla shares to grow so quickly, he said the fact that the award comes in Tesla stock is that “they’re needed to help pay for humanity to get to Mars in 10 to 20 years”.
This article originally appeared on the New York Post and was reproduced with permission
Originally published as Tesla was ‘a month away’ from bankruptcy while making the Model 3
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