By on November 26, 2018

According to Tesla CEO Elon Musk, the automaker was teetering on the edge of disaster earlier this year. “Tesla faced a really severe threat of death due to the Model 3 production ramp,” Musk told Axios during a video interview on HBO. “Essentially the company was bleeding money like crazy and just if we didn’t solve these problems in a very short period of time, we would die. And it was extremely difficult to solve them.”

Musk said Tesla was within “single-digit weeks” of an unrecoverable catastrophe. While we appreciate his present candor, the assertion doesn’t mesh with comments made earlier.

In fact, Elon was down on the automotive firm needing more funds every since it posted its 2011 financial results. “Tesla does not need to ever raise another funding round,” he said in response to a question on the company’s cash position back in February of 2012. “We may want to do so, but we are in a strong cash position, and we don’t need to.” 

That narrative has been revisited several times, with the most recent examples occurring this summer when Musk said Tesla would not be raising equity at any point. “Are we running low on money? The answer is no,” he said last August. The CEO even joked that the company had gone bankrupt for April Fool’s Day 2018, in a snide response to industry analysts who claimed the automaker was quickly running out of cash.

However, it appears the automaker actually needed quite a bit of funding to keep itself away from the cliffs of doom. Based on Musk’s interview, the period where he was sleeping at the factory this summer was also the moment when Tesla was in the worst trouble. Meanwhile. automotive outlets — including this one — suggested Tesla’s situation was more dire than it let on.

Fans of the brand didn’t see it, however, and often had their rebuttals at the ready. While we’d normally love to bask in the warmth of a well-earned “told you so,” the mere fact that the public’s trust in Tesla never seems to waiver is one of the reasons for its success. In fact, Musk’s hype-driven narrative was probably an essential piece of Tesla’s overall strategy. It accomplished its goals, eventually hitting Model 3 production targets without additional fundraising — albeit with some serious hiccups.

Musk’s attempt to take the company private was a big distraction over the summer and the Model 3 has still spent the majority of its life behind schedule. The Axios segment appears to illustrate just how beaten-down the process left the CEO. He admitted that nobody should work as hard as he did in 2018, adopting a defeated posture. “It hurts my brain and my heart,” he explained.”It is not recommended for anyone. I just did it because if I didn’t do it … there was a good chance Tesla would die.”

However, it doesn’t change the fact that the company’s leadership wasn’t upfront about its situation. But when has that ever been the case with an automaker? They alway promise the moon while delivering the closest approximation they can muster. While this might feel like a slap in the face, it’s really just another reason we should keep our eyes wide open when watching the industry.

 

[Image: Tesla Motors]

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35 Comments on “Video: Elon Musk Admits Tesla Almost Died Over the Summer...”


  • avatar
    afedaken

    Look, if only to keep from undoing what good he’s already done for the industry, would someone PLEASE MAKE HIM SHUT UP?

    This is not the kind of thing that inspires investor confidence, to say nothing of the public’s confidence.

  • avatar

    With GM going down the tubes Tesla could have a rebirth.

  • avatar
    EBFlex

    Damn! We were so close!!!

  • avatar
    Asdf

    Tesla going bankrupt would have been the most deserved bankruptcy of the century. It’s really incredible how that company has managed to exist for so long, despite specializing in BEVs that are defective by their very design, particularly with regards to their EXTREMELY LONG charging times. It’s really mind-boggling, but it still (!!!!!) takes A LOT longer than the five minutes one would reasonably expect it to take to fully charge a Tesla’s battery in this day and age, which is especially embarrassing when we take into account that ICE-powered cars have been able to top up within this time FOR DECADES without any issue.

    Make no mistake about it, though – Tesla WILL go bankrupt.

    • 0 avatar
      PandaBear

      Agree about Tesla should have been bankrupt by now but dude, 5 minutes to fully charge? Seriously do you know what you are talking about?

      Most other EVs are charging just fine and Tesla have super charger, company parking lots have charging port, and most people know the range and charging speed when they sign the dotted line.

      You know who should have gone bankrupt? the coal industry, by the natural gas and fracking boom.

      • 0 avatar
        Asdf

        Yes, fully charging a BEV shouldn’t take longer than filling a fuel tank, that’s a perfectly reasonable expectation. Consumers shouldn’t have to put up with a charging time that’s longer than a refueling time just because the fuel tank is replaced with batteries.

    • 0 avatar
      HaveNissanWillTravel

      Unless technology can bring charging time to under 10 minutes it will be superseded by hydrogen fuel cell no doubt in my mind.

    • 0 avatar
      vehic1

      OMG! 30 minutes for a fast-charge, versus 5? minutes for a gas stop (if no other food, restroom, etc. additional time)!!! MUCH preferable to continue spewing poisonous toxins into the atmosphere – from millions, billions of quasi-maintained ICE powerplants and fuel tanks; SO much better for children, families, etc. The extra 50? or less – minutes, to drive 400 or so miles – absolutely INSANE! – we’ll take the cancer and emphysema instead, please!

      • 0 avatar
        riggodeezil

        I hear you. But you are pissing into a gale-force wind. The Goob doesn’t want to wait for anything and he especially isn’t going to build 30 minute pit stops into his hectic and increasingly desperate life. He also doesn’t want his ‘roids flaring up over “range anxiety”. So, yeah, ten minutes, max, and there better be a place to plug in that is “on the way”. You are dealing with lowest common denominator troglodytes not compassionate, fully cognizant eco-warriors (God bless them). If you want EVs to take over the world then you’ve gotta make it work for The Goob. Otherwise they will just get relegated to the dustbin of history or continue on as novelties and/or “lifestyle statements”.

      • 0 avatar
        Asdf

        It’s telling, then, that Tesla stubbornly refuses to fix the charging defect in all its vehicles, if it is a matter of avoiding “spewing poisonous toxins into the atmosphere – from millions, billions of quasi-maintained ICE powerplants and fuel tanks; SO much better for children, families, etc” as per your worldview. If Tesla really cared about any of this, BEVs with a charging time of 5 minutes would have been available by now, as that would have made BEVs able to compete with ICE-powered cars to the point BEVs could replace them. The fact that such BEVs are not available yet even after all this time tells us Tesla doesn’t care, and doesn’t mind.

        By the way, 30 minutes is not a “fast charge”.

      • 0 avatar
        riggodeezil

        I hear you. But you are spitting into a gale-force wind. The Goob doesn’t want to wait for anything and he especially isn’t going to build 30 minute pit stops into his hectic and increasingly desperate life. He also doesn’t want his ‘brain to ache up over “range anxiety”. So, yeah, ten minutes, max, and there better be a place to plug in that is “on the way”. You are dealing with lowest common denominator troglodytes not compassionate, fully cognizant eco-warriors (God bless them). If you want EVs to take over the world then you’ve gotta make it work for The Goob. Otherwise they will just get relegated to the dustbin of history or continue on as novelties and/or “lifestyle statements”.

    • 0 avatar
      JoDa

      5 minutes to fully charge? It takes me 3 minutes to fully charge my hybrid and I get 600 miles per charge! :)

  • avatar
    redrum

    Whether you like him or not, it’s pretty clear that Musk is an unreliable narrator on the state of Tesla, and this statement should be taken with the same grain of salt as everything else he says. I think it’s more likely he is exaggerating how close they were to bankruptcy because it makes him look more heroic, creating his own “Behind the Music” moment of tragedy and triumph.

  • avatar
    indi500fan

    Reading lots about the quality / reliability problems that these Model 3s have. Back in the Model S days they could handhold the customers but with a volume product it appears their service / support side is getting overwhelmed. Also a bunch of stories about long waits and reduced wattage at the supercharge booths as the user numbers ramp up.

    • 0 avatar
      Lockstops

      Model 3’s quality / reliability is probably about as sound as Elon’s.

      It makes sense that the creator’s products are at least somewhat a reflection of himself. He does have a lot of professionals trying to make his clusterF work though, so it’s not a 1:1 mirror image of course.

    • 0 avatar
      hifi

      The stories are overstated, and are often outright bogus. It’s always unintentionally hilarious when a rabidly angry Tesla “owner” gets outed as a fraud on FB. I have an X, and know three people with Model 3’s. I can tell you first-hand, that Tesla isn’t perfect. But they’ve achieved a level of perfection that domestic, and most foreign automakers can only dream of achieving. The level of service is far superior. My last service request was done in my driveway by a Tesla technician… to swap-out my winter and summer tires. One defect over the duration of a year of driving it. I have saved hours of time and effort by charging my car at home instead of going to a gas station. The supercharger that I use is in a parking lot of a supermarket and a Starbucks. So it doesn’t matter if it charges at 80amps or 90amps, because I literally spend zero minutes waiting for my car to charge for $0. After a year in a Tesla, I finally sold my other two cars. Yes I would like more range, particularly in the winter. But my departed, smaller, slower, far less reliable Range Rover Sport got 13mpg on a good day, and didn’t offer much more range. But the fuel-up process was substantially more annoying and intrusive, which was something I didn’t even consider until I didn’t have to do it anymore. Fanboys exist for a reason. On my last business trip, I rented an E Class. And that cinched it… It was a good car, but there’s no way I’m ever going back to tractor-based vehicles.

  • avatar
    Darkdowgow

    Head of publicly traded company misled fiscal health of same company. Expect an SEC visit.

  • avatar
    RHD

    “waver”, not “waiver”

    Now that that’s out of the way, it’s worth noting that mental instability and creativity go hand in hand, although not very often.
    Mr. Musk is forward-thinking, intelligent and creative, but needs to keep his manic side under control. The occasional ingestions of THC won’t help anything, either.

    The undoing of Tesla, if it comes about, will be when other automakers offer similar vehicles with better quality and/or lower prices. Tesla can’t be the only electric car maker forever.

  • avatar
    Lockstops

    So that means that Tesla didn’t almost die over the summer…

  • avatar
    CarnotCycle

    CEO’s overhype all the time. Elon Musk differs from most CEO’s in that people beyond the 10-K aficionado set care. Elon oversold Tesla’s health this summer as much as he oversells the imminent death shtick now. Does anyone with a brain take this guy at literal face value? C’mon man.

    And I keep saying the same thing on these articles about Tesla’s solvency; and that’s read the balance sheet. Tesla was slated to run low on cash by about late summer, right in crunch of at-any-cost-capex for the Model 3. This could be extrapolated back in Q2, again by reading the balance sheet.

    Now Tesla is cash-flow positive, but only in the pseudo-real “EBITDA” sense. For a hype stock that’s good enough to fend off the pitchfork investors. But expect another capital facility (another equity issue, different loan, another deposit-gimmick) in next couple quarters to re-structure debt once the Elon-so-sketchy fad wears off.

    Tesla’s biggest challenges next year (beyond the faster-faster treadmill Model 3 represents) will be avoiding Solar City financial tumors ingested into Tesla metastasizing into capital-P Problems for Tesla, and the very real possibility Porsche will swim into Tesla’s Model S pond with a car just as electro-sleek, at least as fast, and does the little things right like door latches, rattles, paint finish, clunks, etc. that for Tesla cars seem perpetually in a beta release kind of quality.

  • avatar
    Master Baiter

    The only reason a CEO would sleep in the factory would be to ensure all of his underlings do the same.

    Man, I’m glad I don’t work at Tesla.

    • 0 avatar
      mcs

      @Master Baiter: My son keeps in touch with his college classmates – mostly engineers. They’re at a lot of top companies like Amazon and Boeing. He also has friends at SpaceX and Tesla. I haven’t heard the details, but he has first-hand info from his friends that yeah, you wouldn’t want to work at either company.

      There are plenty of other companies that suck. I once worked for a major defense contractor. At my annual review, I was criticized for missing milestones on my project for the first three months of its life. I asked them to take a look at my hire date – it was three months after the scheduled start of the project. The morons tried blaming me for missed deadlines before I was even an employee. They were totally clueless. I was really expensive and they were desperate to find a way not to give me another increase. They thought they had one.

      • 0 avatar

        Nothing sucks more than working for GM. Just ask GM workers today.

        GM – what a disgrace!!!!

      • 0 avatar
        mypoint02

        There was a timely article in the WSJ yesterday about young people wanting to work at Tesla. Apparently, young idealists are drawn to it. Some things stuck out to me though. The pay for engineers is not good (at least 20% less on average compared to other Silicon Valley companies) and “some are willing to work 100 hour weeks”. That being said, many of the interviewed put in a year or two and left. Just wanted it on the resume. Never in a thousand years would I sign up that, but apparently they have people beating down the doors. Unbelievable.

  • avatar

    Tesla haters – rejoice! While you can. Because Tesla will take over industry. It already forced GM and Ford to lay off tens of thousands employees and switch to BEV.

  • avatar
    Whatnext

    Sorry but on a day when soulless corporate crone and GM CEO Mary Barra just shat all over the lives of thousands of employees, after she took home almost $30 million last year, I’ll go with the dedicated CEO who sleeps on the factory floor.

    • 0 avatar

      Nice narrative, but sleeping in the factory was a sign of a dysfunctional executive not a committed leader. Elon is not an expert in these things. Instead he tries to hires experts frustrates them and they leave. Hence the basket case nature of the company.

  • avatar
    JoDa

    Many people who have purchased EV autos in the colder regions here in Europe are now regretting their choice. I can see Tesla making a profit in China but nowhere else.

  • avatar
    JoDa

    Thermodynamics – Not just a good idea…it’s the law.

    This might be hard to understand for those who did not study physics.
    Carrying electrons in an encased goo is dangerous.

  • avatar
    28-Cars-Later

    Thermodynamics …it’s the law™

  • avatar
    Tiberius1701
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