Early in 2013, Tesla found itself struggling to turn customers who had preordered vehicles into actual buyers. As a way to save the company, CEO Elon Musk began negotiating with his old friend Google CEO Larry Page on the possibility of selling the car company to the search giant.
Musk proposed a $6 billion acquisition deal for Tesla with an additional $5 billion in capital in order to keep the company in business.
Moreover, Musk wanted Google to guarantee his own continued involvement in the business and that Tesla would continue to exist as a unified car company. Page accepted the proposal.
Prior to the negotiation, Musk had been busy with other means to save the company. It was said that he pulled staff from every department into a meeting.
Musk ordered his staff to call people who had placed reservations on their Teslas and close the sales.
"If we don't deliver these cars, we are f---ed," said Musk. "So I don't care what job you were doing. Your new job is delivering cars."
The next events showed just how serious Musk was in turning the tide around for Tesla. He fired senior executives, moved anxious junior employees up the ladder and even delegated former Daimler executive Jerome Guillen the task of fixing Tesla's repair service and eventually putting Tesla cars back on the road.
Musk even made a proposal to unsatisfied buyers who were thinking of reselling their Model S: he would personally give them their money back "if they couldn't sell their car at a price comparable to that of another luxury model."
The days leading to the acquisition were winding down, but Tesla found its shares quintuple at $200 per share. Sales began to pick up and Tesla was back to making a profit. The company was also able to pay off its $465 million loan, with interest, from the U.S. Department of Energy.
As a result, Musk called off the deal with Google. Tesla no longer needed a savior. The company's market valuation today is around $25 billion, and Musk even has dreams of growing this value to $700 billion.
The story on the acquisition deal that never pushed through between Google and Tesla is recounted in Ashlee Vance's new book Elon Musk: Tesla, Space X and the Quest for a Fantastic Future due on May 19.
Photo: Steve Jurvetson | Flickr
