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Elon Musk had an $11 billion deal in place to sell Tesla to Google in 2013

Apr 20, 2015, 17:47 IST

Elon Musk almost sold Tesla to Google in 2013, according to Ashlee Vance, author of a new book on Musk.

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At the time, Tesla's Model S was new, and buggy. Tesla was losing sales, and it was looking like it might go bust.

Google was Musk's savior.

From an excerpt published on Bloomberg today:

In the first week of March 2013, Musk reached out to [Google chief Larry Page], say the two people familiar with the talks. By that point, so many customers were deferring orders that Musk had quietly shut down Tesla's factory. Considering his straits, Musk drove a hard bargain. He proposed that Google buy Tesla outright - with a healthy premium, the company would have cost about $6 billion at the time - and pony up another $5 billion in capital for factory expansions. He also wanted guarantees that Google wouldn't break up or shut down his company before it produced a third-generation electric car aimed at the mainstream auto market. He insisted that Page let him run a Google-owned Tesla for eight years, or until it began pumping out such a car. Page accepted the overall proposal and shook on the deal.

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The deal never happened because Page and Musk started dickering over specifics of the deal. While they negotiated, Tesla started selling enough cars to earn a profit. Once it earned a profit, the company was stable enough to stand on its own.

Today, Tesla's market cap is $26 billion. If Google had bought it for $6 billion, it would have been a steal.

Here's a link to Vance's book.

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