With a share price that’s consistently hovering in the $200 range and an award-winning car, Tesla these days is sitting pretty. But before Tesla began selling Model S cars faster than it could make them, there were a lot of questions surrounding the company’s ability to turn a profit, let alone thrive as a viable entity.
In a bombshell revelation posted by by Bloomberg, and excerpted from the upcoming book Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future, we learn that Tesla CEO Elon Musk was extremely close to finalizing a deal to sell the entire company to Google.
According to the book, Tesla in early 2013 was in dire financial and operational straits, prompting Elon Musk to reach out to Larry Page in the hopes of securing an acquisition.
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.
The deal, however, ultimately fell through on account of Musk’s more stringent demands. The entire excerpt is well worth reading in its entirety as it provides a well of additional information about a wildly intriguing acquisition that was almost finalized.
All in all, things turned out pretty well for Tesla. Beginning in May of 2013, shares of Tesla began a meteoric rise to the $280 range. More importantly, on the operations front, the Model S began selling like hotcakes, with demand still outstripping supply in every market outside of China. Further, with gigafactory construction already underway, not to mention the impending release of the Tesla Model X, Tesla’s future prospects have never looked brighter. Indeed, during the company’s most recent quarter, they sold more Model S units than ever before, 10,030 to be exact.
With so many folks over the years suggesting that Apple should buy Tesla, it’s interesting to consider that Google of all companies was the one that almost pulled the trigger.