The world’s most celebrated entrepreneur released his new business plan under the pretentious title of Part Deux, which is pretty funny in and of itself. But, the real fun comes from his explanation of his modest goals in the first Master Plan.
I submit the following from Tesla’s website:
The reason we had to start off with step 1 was that it was all I could afford to do with what I made from PayPal. I thought our chances of success were so low that I didn’t want to risk anyone’s funds in the beginning but my own. The list of successful car company startups is short. As of 2016, the number of American car companies that haven’t gone bankrupt is a grand total of two: Ford and Tesla. Starting a car company is idiotic and an electric car company is idiocy squared.
There is plenty in there that is funny when looked at in a certain way. But my favorite is the whopper about using his own funds. It makes you wonder if Mr. Musk can add, or read a balance sheet…it may be the reason why he brags about his company’s astonishing success when it has never made a dime.
Ford for all of their issues and problems as a huge old sclerotic company, at least makes a profit most years, and it makes millions of cars. Tesla makes a teeny weeny number of cars in comparison and has never had a profitable year.
Elon Musk Funded Tesla with His Own Money, and $5 Billion More
As for doing it with his own money, well Mr. Musk did put in 70 million bucks, a considerable sum indeed. Elon Musk’s $70 million was the seed money that raised another $117 million from investors.
I thought our chances of success were so low that I didn’t want to risk anyone’s funds in the beginning but my own.
Point being, Tesla has survived on other peoples’ money throughout its entire existence. And a lot of that money comes from the U.S. government in the form of grants and tax benefits. It was calculated that Tesla has approximately $2.4 billion in tax incentives, most of which were granted by Nevada.
In addition, there was a $465 million dollar grant from the U.S. Department of Energy, $50 million from both Daimler and Toyota, and $226 million raised from the IPO. Since 2013, Elon Musk has been big on bonds, raising $1.02 billion in 2013, $2 billion in 2014, and more. All in all, Tesla has raised $4.5 billion since the company went public.
That’s great and all, but it is a lot of money raised from investors, a fabulous amount of money for a company that produces very little that is real. And, it is pretty funny when Mr. Musk claims that he self-financed the company. Can Musk do math? Or does he think his investors are fools? Someday, the owners of that $4.5 billion in bonds are going to come knocking; Tesla has a pretty big hill to climb to have a prayer of paying them back.