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How Elon Musk Almost Went Bankrupt For Tesla! | The Story of Tesla

Elon Musk and Tesla have become synonymous, his personal ties to the company extend far beyond providing direction and vision. He's invested vast amounts of his personal money when others had little to no faith and many a time has he or the company come close to bankruptcy but what does that mean for the company today?

elon musk bankrupt

When Tesla first launched in the early 2000s CEO Elon Musk faced criticism and skepticism from other automakers, stakeholders and car buyers alike but he saw the potential of electric vehicles and persevered. The journey for Musk has never been smooth sailing. The original Tesla Roadster launched in early 2008 showcasing just what the company was capable of creating although based on a modified Lotus Elise chassis, the electric powertrain was entirely the work of Elon Musk and his team. A 0 to 60 miles per hour sprint time of less than four seconds, an instant talk really shocked the world but with a price tag of over eighty thousand dollars only two and a half thousand were ever sold. It was later that year that the company was experiencing its first major financial scare seen more as a gimmick than as a reality.

Also Read: Elon Musk Doesn't Have An Office! and Here is the Reason

Consumers weren't being attracted to the company the way Musk was hoping but he was already preparing the next step of launching a premium mass-market model S. After putting all his money and personal assets into the company, the struggle was still on. Tweeting more recently about the historic event saying “I thought we would still fail but on the last hour of the last day possible the company was saved by a 40 million investment; the hour and the day 6pm on Christmas eve” a true Christmas miracle which eventually helped him rely less on borrowing money from friends for a rental home at this point the company was just three days from bankruptcy and impending collapse.

The company began to grow and financial struggles grew to be a thing of the past. Millions watched as the automaker released four mainstream models the S, X, 3 and Y. But things weren't perfect just yet, rather than pay himself a massive CEO wages, Musk famously agreed in 2018 that he would forego a salary in favour of the right to buy Tesla stock at its 2018 price later down the line providing he reached certain targets for the company's growth years go by with no mention of the company's hardships. when in a discussion with fellow twitter users about the company's fundraising history, just this year Elon Musk stated that the model 3 ramp was extreme stress and pain for a long time, which he says spanned a two-year period between mid-2017 and mid-2019.

A production and logistics held meant that the company was spending more than it was receiving. Putting it in a very precarious position so much so that he says Tesla was at one point about a month from bankruptcy. In the first six months, less than 2000 model 3s were shipped but things began to work out and production ramped up to 6000 units a week by the end of 2019 which has resulted in more than half a million Teslas on our roads already.

Also Read: Why Elon Musk Became Buy Twitter? How will it Affect Us?

The car that almost broke Tesla is more ironically the car that saved the company. Its sub 40 thousand dollar base price meant interest in the company spiked just at the right time with the production of the model 3 still going well, Tesla reported its most profitable financial quarter to date on October 21st. Quarter 3 of 2020 says Musk was the fifth quarter of consecutive profit for the company. It's clear that the mass market model 3 was just the solution to tackle the company's financial woes. This growth has been a huge boost for the company which has opened factories around the world.

tesla car crashing into tesla board

The original Gigafactory in Nevada has since been sharing its title with Gigafactories in New York and Shanghai. The latter tasked with producing 150000 model 3s before increasing to a quarter of a million model 3s and model Ys promising figures for the company has seen Musk committing to spending up to 12 billion dollars on electric car and battery factories between 2020 and 2022 which starts with the fourth and fifth Gigafactories being assembled in Berlin and Texas.

From a launch faced with skepticism in the early 2000s and a rocky start with the unpopular Roadster, Tesla has certainly come a long way. The brand is currently marked as the world's most valuable automaker with its market cap worth a cool 509 billion at its peak that's more than double the next most valuable car maker Toyota with share prices up by around $400 this year. Musk is now maintaining a healthy industry-leading profit margin with a keen vision to stay that way but the good news doesn't stop there. In a shocking turn of events in late November 2020 and after contributing so much of his own wealth and personal assets to help grow the company, CEO Elon Musk has become the second richest single person on the planet worth an estimated 128 billion and second to none other than Amazon CEO Jeff Bezos whose net worth is said to be 182 billion dollars which has also increased this year due to a surge in demand for online shopping this news pushes Bill Gates to a very close third position at 127.7 billion.

Also Read: How Elon Musk Is Changing The World

After an eventful few weeks for Tesla coming as a result of a sudden spike in share prices which took Musk's net worth from 7.2 billion dollars to 128 billion dollars mostly thanks to his ownership of 20% of Tesla's shares many experts expect this to grow even further maybe even pushing Musk to be the richest man on earth. Due to many countries efforts to reduce carbon emissions by implementing bans on petrol and diesel cars his ambitions to launch a $25000 entry-level Tesla may be the solution to make Tesla ownership affordable to all motorists heightening demand and skyrocketing the company's value.

One thing that puts Tesla CEO Elon Musk in a different category to other influential and wealthy people is his avid use of twitter, He expresses himself freely on this platform which has sometimes gotten him into trouble but we can say this for sure we wouldn't know a portion of the things we know today about Tesla if Musk hadn't posted so frequently and interacted with real people who display curiosity in his work. This level of transparency puts Tesla in a category all on its own totally incomparable to any other company which in turn helps build a real feeling of trust and loyalty for many customers. Could this news spell the end for Tesla's financial worries or could the rumoured $25000 model put the company back to a production and logistics? Hell regardless with the CEO so personally invested in the future and success of his company it's unlikely Tesla's going anywhere just yet.

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