Tesla was mere weeks away from death in the past year, Musk says
Elon Musk has revealed how close Tesla Inc. came to collapse during the frantic and costly effort to ramp up production of the Model 3 sedan: little more than a couple of months.
“The company was bleeding money like crazy, and if we didn’t solve these problems in a very short period of time, we would die,” Musk told the news service Axios in an interview aired Sunday onHBO.
When asked how close Tesla was to failing, he replied: “I would say within single-digit weeks.” Musk’s comments come as a surprise because while questions swirled earlier this year regarding whether Tesla needed to arrange a capital raise, there were scarce predictions that the company would fail outright. Tesla’s run of losses and significant cash burn was finally snapped in the third quarter, when unexpectedly positive earnings suggested Musk could realize his goal of making electric cars financially sustainable. Once the company was able to boost production of the Model 3, deliveries have quickly taken off. Musk has also been embroiled in legal trouble over the past year due to his tweets claiming he was on the verge of taking Tesla private. While the company’s shares tumbled during that episode, they’ve rebounded as its earnings outlook has improved. The stock gained 6.2 per cent to close at US$346 on Monday.
Tesla remains under SEC scrutiny. The company disclosed earlier this month that the agency issued subpoenas regarding Musk’s statements about taking the carmaker private and about projections he made in 2017 about Model 3 production. The Justice Department also has asked for information about both matters and is investigating, according to the company.