Tesla CEO Elon Musk has revealed that the electric vehicle and solar power company was a month off bankruptcy during the evolution of the Model 3 sedan from 2017 to 2019.
Musk spent part of the US election day interacting with some of the 39.7 million followers he has on Twitter. He was asked about Tesla, the most valuable vehicle manufacturer in the globe, securing a US$40 million loan to avoid bankruptcy on 3 November 2018.
Then the billionaire was asked by one user how close Tesla came to Chapter 11 bankruptcy during the production increase for the Model 3 sedan. Musk replied that the “closest we got was about a month”.
How close was Tesla from bankruptcy when bringing the Model 3 to mass production?
— Zain (@ZainRaz4) November 3, 2020
“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
During that two-year period, Tesla stumbled from crisis to crisis, from Musk causing controversy for (legally) smoking cannabis on a podcast to issues manufacturing its Model 3, which the automaker was counting on to bring it to profitability, New York Post reported.
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”.
The electric vehicle maker turned the corner in October last year. In the past 12 months, Tesla shares have seen their value increase 540%. With a market cap just short of US$400 billion, Tesla is by far the most valuable automaker in the world. The Tesla Model 3 is the world’s bestselling electric car in history.
Musk briefly touched on his eye-popping CEO compensation package, which last week landed him another US$3 billion, for a total of US$11.8 billion.
Musk said that he did not expect the company’s 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”.
In May, Musk’s company SpaceX became the first private company to launch people into orbit, a feat achieved previously by only three governments: the US, Russia and China. It also became the first private company to take NASA astronauts to the International Space Station and then bring them back to the US.