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According to a November Quartz article, Tesla is now worth more than GM, Ford, Toyota and almost every other car company combined. Hard to believe, right? Especially when you consider that back in 2013, Tesla was so broke that Elon Musk came close to selling it to Google.
The deal? A tidy $6 billion up-front plus $5 billion for factory expansions. But in true Musk fashion, he pulled the plug at the last second – not out of arrogance but because Tesla's fortunes reversed practically overnight.
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According to Ashlee Vance's biography Elon Musk: Tesla, SpaceX and the Quest for a Fantastic Future, Tesla's situation in early 2013 was dire. The company had just two weeks of cash left, preorders weren't turning into sales and word-of-mouth for the Model S wasn't great. Customers complained about design flaws like stubborn door handles and ugly seams in sun visors. To make matters worse, some Tesla executives had kept the full scope of the crisis from Musk.
When Musk found out, he fired key senior staff, promoted junior employees he believed had more drive and even called in Jerome Guillen, a Daimler executive, to revamp Tesla's repair centers. Musk then issued a companywide mandate: "If we don't deliver these cars, we are f***ed. So I don't care what job you were doing. Your new job is delivering cars."
Even with these drastic measures, Tesla's future looked bleak. Musk shut down the factory temporarily and approached Larry Page, Google's cofounder, with a lifeline deal.
Musk and Page, already friends, hashed out terms that would keep Tesla alive. According to Vance, the agreement included several key points:
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Google would buy Tesla for $6 billion.
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It would allocate $5 billion for factory expansions.
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Tesla would remain an independent brand and Musk would stay on as CEO for up to eight years or until Tesla launched its third-generation vehicle.
The deal seemed nearly finalized, with lawyers drafting the paperwork, but then Tesla's fortunes made a dramatic U-turn.