Google was about to buy Tesla
Tesla Motors owner Elon Musk almost sold his company to Google in March 2013. He would have signed a takeover deal with Google CEO Larry Page, because Tesla was in trouble. When Tesla’s sales surged, Musk called off the deal.
The near-deal is detailed in a pre-published book Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future, due out May 19. Author Ashlee Vance, a tech journalist for Bloomberg, interviewed Musk and more than 300 others for his book on the entrepreneurial billionaire.
Tesla was in trouble in early 2013. The Model S, the company’s first electric sedan, introduced in June 2012, had a number of teething problems. For example, the sun visors were not properly finished and the extendable door handles showed problems. A critical review in The New York Times also did the reputation of the car no good. Musk said the article cost his company $100 million. Customers postponed their purchase en masse. Musk even had to shut down the Tesla factory in Fremont, California, in the first week of March.
Musk entered into talks with Page about a takeover. He is said to have asked for nearly $6 billion, about $5.6 billion, for his company, plus a commitment that Google would invest $5 billion in expanding the factory. Musk would also have made it a condition that Google would not split or close down the company until it had launched a third-generation electric car. In addition, Musk allegedly asked Google to guarantee that he could remain in charge of the company for at least eight years or until Tesla released a third-generation car. Page would have agreed.
While lawyers from Google and Tesla negotiated the details of the agreement, Tesla suddenly started selling thousands of cars. According to Vance, Musk had personally put together a team that had to convince people with a reservation for the Model S to buy the car after all. Due to the good sales, Tesla closed its first quarter with a profit at the end of April. As a result, the Tesla share more than doubled and the financial problems were averted, so that Musk no longer needed Google.