The millionaire magnate behind the world's best-known electric carmaker was on the verge of selling his company to Google as it failed to turn a profit.
Elon Musk's Tesla was about to fall into bankruptcy and the founder had begun negotiating with Google on a deal for the firm, according to a new book on Musk, an excerpt of which is published by Bloomberg.
As the company struggled to sell its Model S car, "Tesla was heading toward a death spiral of missed sales targets and falling shares" by Valentines Day in 2013.
According to the soon to be published book by Bloomberg's Ashlee Vance - Elon Musk: Tesla, SpaceX and the Quest for a Fantastic Future - the severity of Tesla's problems were hidden from Musk. When he found out however, he rallied his staff behind delivering cars, it's claimed.
Musk reached out to Google boss and friend Larry Page, and the two are said to have "[shaken] on a deal" under which Google would have bought Tesla outright for $6bn (£4bn) and another $5bn in capital for expansion with the promise of not breaking up the carmaker, as well as for Musk to remain on board for eight years, or until it started making a third generation mass-market electric vehicle.
Spokespeople for Tesla and Google declined to comment to Vance. Page added that "I don’t want to speculate on rumours”, saying a “car company is pretty far from what Google knows”. (Which is presumably exactly what was going through his head when the company embarked on a programme of developing a driverless car...)
"While the two companies were negotiating, Tesla’s frenzy of sales calls began to pay off, and a lot more people started buying the Model S. With its quarter drawing to a close and two weeks worth of cash in its coffers, Tesla began selling thousands of cars, enough to post an $11m quarterly profit on $562m in revenue," Vance claims.
"Within two weeks of that announcement, the company’s shares had doubled, and Tesla had repaid its $465m loan from the US Department of Energy early, with interest. Musk broke off his negotiations with Google. He no longer needed a saviour."