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Tesla Was A Month Away From Bankruptcy Ahead Of Model 3 Rollout, Says Musk

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Tesla Was A Month Away From Bankruptcy Ahead Of Model 3 Rollout, Says Musk

Tesla CEO (NASDAQ: TSLA) Elon Musk disclosed Tuesday that the automaker was “about a month” away from bankruptcy just as the Model 3 sedan was readying for mass production.

What Happened: The executive said on Twitter that the period between mid-2017 and mid-2019 when the Model 3 ramp commenced was  “extreme stress [and] pain for a long time.” Musk described the time period as “production [and] logistics hell.”

“I put in my last money, even though I thought we would still fail. But, it was either that or certain death for Tesla,” the billionaire entrepreneur said in a tweet.

Musk said it was “extremely difficult to raise money for an electric car startup” at a time when competitors like General Motors Company (NYSE: GM) and Chrysler, now known as Fiat Chrysler Automobiles NV (NYSE: FCAU), were going bankrupt.

The Tesla CEO also talked about his executive pay package that includes stock options when he meets certain benchmarks. 

“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," Musk said, referring to SpaceX and its ambitions with the red planet. 

Why It Matters: The Palo Alto-based automaker has come a long way since the challenging days Musk described in his tweets, with the Model 3  emerging as the most popular EV in the world this year.

The model dominated the Chinese markets this summer — with 11,014 units sold in July in the country. 

At the beginning of the year, Tesla started producing the Model 3 at its Shanghai Gigafactory and the main structure of the second phase of that facility meant to produce Model Y is also now complete.

The automaker began exporting China-made Model 3 vehicles to more than 10 European countries including Germany, France, and Switzerland last month.

Price Action: Tesla shares closed nearly 5.8% higher at $423.90 on Tuesday and gained 0.17% in the after-hours session.

 

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