That Time Google Almost Bought Tesla for $11 Billion
Tesla, the $26 billion electric hot-rod powerhouse, is revving up to be one of the hottest automakers in the world. But, like most tech startups, it came this close to stalling out on the rough road to success. And when Tesla almost bottomed out, Elon Musk turned to Google to save it.
That was back in March of 2013, when Musk asked his friend and Google co-founder and CEO Larry Page to rescue his struggling luxury car company from bankruptcy, according to a forthcoming book on the billionaire futurist by Bloomberg tech reporter Ashlee Vance. Tesla sales were slumping, rumors of dangerous glitches spread like engine fires and even Musk himself admitted that “The world of mouth on the [Model S] sucked.”
Tesla needed a hero with big pockets and fast. With only “two weeks worth of cash in [Tesla’s] coffers” left, Musk didn’t pussyfoot around. His asking price was steep. He wanted Google to purchase Tesla for $11 billion -- $6 billion for the company and $5 billion in capital for factory development, per an excerpt from Vance’s book published on Bloomberg yesterday. The passage cites two unnamed individuals “familiar with the talks.”
Of course, rescue money wasn’t all Musk wanted. “He also wanted guarantees that Google wouldn’t break up or shut down his company before it produced a third-generation electric car aimed at the mainstream auto market,” the excerpt reads. “He insisted that Page let him run a Google-owned Tesla for eight years, or until it began pumping out such a car. Page accepted the overall proposal and shook on the deal.”
Negotiations began. Google’s lawyers hashed out the nuts and bolts of the deal. Things were looking good, give or take a few haggling spates between Musk and Page. Meanwhile, Tesla’s sales picked up and its fortunes began to turn in the right direction. Musk’s need for the search giant’s life preserver subsided and the talks of a buyout fizzled, eventually falling apart altogether.
Fast forward to today and Google has somewhat adorably driven into the self-driving car race. With a current market cap topping $26 billion and more than 50,000 vehicles on the road worldwide, Tesla is humming along in the sizzling electric vehicle market at a nice clip. Some predict it's even on track to get scooped up by Apple or General Motors. Page is probably kicking himself for not snatching it up when he had the chance...and Musk might laugh all the way to Mars.