Tesla Inc. was “bleeding money like crazy” during its Model 3 production ramp-up and almost went under earlier this year, Elon Musk said Sunday. In an interview aired Sunday night on “Axios on HBO,” Tesla’s chief executive said the electric-car company was “within single-digit weeks” of dying.
This contradicts what Musk said earlier in 2018 during various earnings calls and interviews. And it’s not clear why he’d change his tune.
The new confession risks souring relationships with financial regulators, investors, creditors and suppliers, even employees. They all made deals with Tesla given a certain understanding of its financial well-being in 2018.
Specifically, during the Axios interview on HBO, Musk said: “Tesla really faced a severe threat of death. Essentially, the company was bleeding money like crazy. And, just, 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.”
Tesla came within “single-digit weeks” of death, he admitted. That is, 9 weeks or less.
Musk admitted in Sunday’s interview that he had been stretched to the limit. “People should not work this hard,” he said of a phase in which he worked 22-hour days, seven days a week. “This is very painful.”
“It hurts my brain and my heart,” Musk said. “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.”
In late October, Tesla posted a surprise quarterly profit, and earlier this month Musk said Tesla is not “staring death in the face” anymore, and it will likely be cash-flow positive for all quarters going forward.
The thing is, Musk had no reason to conceal the harsh reality of Tesla’s growing pains. When the CEO simply admits the challenges Tesla is facing, his legions of followers stick with him, or even double down on their support.
Perhaps if the Tesla CEO trusted his own people more — including social media followers, employees, customers and investors — he’d be willing to talk about what’s wrong at Tesla directly when it’s happening, and benefit sooner from their willingness to help.