After burning through an ungodly amount of cash in recent years, Tesla during the September quarter of 2018 finally managed to turn a profit. The figure itself wasn’t staggering — just about $312 million in net income when the dust settled — but the fact that Tesla proved it could actually generate a profit was a feat many in the auto industry previously claimed was an impossibility.
Interestingly, though, Tesla earlier this year was on the brink of losing it all. During an interview with Axios that aired on HBO over the weekend, Tesla CEO Elon Musk explained how Tesla was spending mountains of cash as part of its broader effort to boost Model 3 production. If you recall, the Model 3 for many months was plagued by a number of production issues, a situation which can be traced back to Tesla’s over-reliance on automation.
Specifically, Musk said that Tesla at one point this year was just a few weeks away from “death” as engineers toiled away and tried to boost production.
“Tesla really faced a severe threat of death due to the Model 3 production ramp,” Musk explained. “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.”
Incidentally, you might recall that Musk himself was working an insane amount of hours as part of a bigger team looking to boost Model 3 production. This past summer, for example, Musk said that he had been working as many as 120 hours a week.
“It is not recommended for anyone,” Musk said in reference to the impact his crazy schedule had on his personal life and his physical and mental health. “I just did it because if I didn’t do it, there was a good chance Tesla would die.”
Of course, the looming question is if Tesla can replicate the success it saw last quarter on a consistent basis.