Elon Musk Nearly Sold Tesla to Google in 2013
Ashley Allen / 4 years ago
Back in 2013, when Elon Musk’s Tesla electric motor car company was on the verge of bankcruptcy, the business was nearly sold to Google, according to an excerpt from the forthcoming biography of Musk.
The excerpt from Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future was featured on Bloomberg Business, and revealed that Musk approached his friend Larry Page, Google’s Chief Executive, about a potential $6 billion bailout for his flailing company, which was suffering poor sales, technical faults, and production issues:
Earlier in 2013 the company was struggling to turn preorders of its vehicles into actual sales. As Musk put his staff on crisis footing to save Tesla, he also began negotiating a deal to sell the company to Google through his friend Larry Page, the search giant’s co-founder and chief executive officer, according to two people with direct knowledge of the deal. Tesla spokesman Ricardo Reyes and Google spokeswoman Rachel Whetstone declined to comment. “I don’t want to speculate on rumors,” Page said when I asked him if Google had considered buying Tesla, adding that a “car company is pretty far from what Google knows.”
The chapter goes on to explain that though Musk was reluctant to sell Tesla, firing senior executives to replace them with hungry juniors in a desperate effort to save the car manufacturer, by March 2013 he was actively courting Google:
In the first week of March 2013, Musk reached out to 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.
After a “frenzy of sales calls”, Musk was able to save the company, with sales of the Model S electric car skyrocketing. Two weeks later, shares in Tesla had doubled and the company had paid back a $465 million loan to the US Department of Energy, turning the business into the success story we’re familiar with today.
Thank you Bloomberg Business for providing us with this information.
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