Market Overview

Musk Admits Tesla Was Close To Collapsing Earlier This Year Amid Model 3 Ramp

Musk Admits Tesla Was Close To Collapsing Earlier This Year Amid Model 3 Ramp

As it turns out, Tesla Inc (NASDAQ: TSLA) suffered more than growing pains throughout this year’s Model 3 production ramp. It survived a near-death experience.

What Happened

CEO Elon Musk confessed in a Sunday interview with Axios that Tesla neared collapse this spring and summer. At one point, it “came within single-digit weeks” of dying off.

"Tesla really faced a severe threat of death due to the Model 3 production ramp," Musk said in the interview that HBO aired. "Essentially, 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. And it was extremely difficult to solve them."

Why It’s Important

Revelations of the company’s struggle may explain some of Musk’s desperate and erratic behavior throughout the last few months. The CEO incurred regulatory scrutiny following unproven claims of a take-private deal, and a series of verbal altercations shook investor confidence in the company’s leader-centric narrative.

The CEO conceded Tesla’s trouble demanded constant work from him that ultimately took a personal toll.

"It hurts my brain and my heart," Musk said in Sunday's interview. "It hurts. It is not recommended for anyone. I just did it because if I didn't do it... there was a good chance Tesla would die."

What’s Next

Tesla believes itself to have beaten any previous ills; management recently guided for GAAP net income and positive free cash flow this quarter on increased Model 3 production and deliveries.

Tesla's stock closed Friday at $329.75 per share and was trading higher by about 1.2 percent Monday morning.

Related Links:

Munster: 'Elon Musk's Desire To Win Every Battle May Cost Him The War'

Would Ford Survive Another Recession? Elon Musk Thinks That's Unlikely

Photo credit: Public domain.

Posted-In: Axios Elon Musk HBO Model 3News Top Stories Media Best of Benzinga


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