Elon Musk Recalls This Day in 2008: Tesla Securing $40 Million to Avoid Bankruptcy
On this day in 2008, the New York Times published a story about electric vehicle (EV) company Tesla, though it was quite different than any stories being published about the company today.
A tweet by @JonErlichman pointed out the fact that Tesla was on the verge of going bankrupt on this day in 2008, though it had just managed to scrounge together a $40 million loan from investors to keep itself alive. Today, it’s hard to imagine what the automotive world could have looked like if Tesla hadn’t secured that loan.
On this day in 2008: Tesla secures $40 million loan to avoid bankruptcy
Today, it’s the most valuable automaker in the world. pic.twitter.com/9ZFqu4Ql2h
— Jon Erlichman (@JonErlichman) November 3, 2020
Tesla CEO Elon Musk shared in replies on Twitter that the time had been one of particular difficulty for him and the team.
Musk wrote, “That funding round completed 6pm on Christmas Eve in 2008. Last hour of last day possible, as investors were leaving town that night & we were 3 days away from bankruptcy. I put in all money I had, didn’t own a house & had to borrow money from friends to pay rent. Difficult time.”
That funding round completed 6pm on Christmas Eve in 2008. Last hour of last day possible, as investors were leaving town that night & we were 3 days away from bankruptcy. I put in all money I had, didn’t own a house & had to borrow money from friends to pay rent. Difficult time.
— Elon Musk (@elonmusk) November 3, 2020
In a follow-up tweet, Musk continued, “I put in my last money, even though I thought we would still fail. But, it was either that or certain death for Tesla. Extremely difficult to raise money for an electric car startup (considered super quirky back then), while stalwarts like GM & Chrysler were going bankrupt.”
Musk also went on to mention that the company had been about a month away from going bankrupt during Model 3 pre-production, though fortunately for customers around the world, they did not.
“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,” said Musk.
“Yes, although I didn’t expect the stock to rise so much so soon. The reason for the stock options is that they’re needed to help pay for humanity to get to Mars in 10 to 20 years,” further added the Tesla CEO.
Without Tesla, it’s tough to say if the transition from conventional gas vehicles to EVs would be as thoroughly underway as it is today.