Elon Musk says Tesla was just a month away from bankruptcy while it ramped up production of the Model 3
- Tesla was just one month from bankruptcy as it ramped up production of the Model 3 electric vehicle between mid-2017 and mid-2019, CEO Elon Musk tweeted on Tuesday.
- Musk described the production process for the Model 3, Tesla's cheapest car, as "extreme stress and pain for a long time," adding that it was "production and logistics hell."
- Tesla was also just three days from bankruptcy in 2008, when Musk had ploughed all his money into the company "even though I thought we would still fail." It was saved by a last-minute investment, he said.
Electric-car manufacturer Tesla barely survived ramping up production of its Model 3 vehicle in 2017, 2018, and 2019, its CEO Elon Musk tweeted Tuesday.
At one point, Tesla was just one month from bankruptcy, Musk said.
The problems occured while Tesla was working towards mass production of the Model 3, its cheapest electric car, between mid-2017 and mid-2019.
Musk described the process as "production and logistics hell."
The Model 3 was slow to come off production lines, and Tesla struggled to make money selling it at $35,000. The company found it hard to string together successive profitable quarters, leaving investors worried.
Tesla was also only three days from bankruptcy in 2008, Musk said, but was saved by $40 million of funding that came through on Christmas Eve, at the "last hour of [the] last day possible."
Musk said it was "extremely difficult" to raise money for an electric car startup in 2008, and that he had put all his money into the business at the time, "even though I thought we would still fail." The company had to lay off 18% of its workforce.
Musk didn't own a house at the time, and had to borrow money from friends to pay rent, he tweeted. "But, it was either that or certain death for Tesla," he added.
The $40 million gave Tesla runway until June 2019, Musk said.
The company was also buoyed by investment of $50 million from Daimler, also known as Mercedes-Benz, in exchange for nearly 10% of Tesla's stock in 2009.
On October 21 of this year, Tesla posted its most profitable quarter ever, blowing past analyst estimates.