On May 8, 2013, Tesla Motors shocked just about everyone by posting its first-ever quarterly profit, reporting higher-than-expected demand for its Model S electric sedan. That moment marked the beginning of a turnaround for Elon Musk’s tumultuous automaker. The next year would see the Model S win most of the automotive industry’s major awards and Tesla’s share price rise roughly fivefold, to more than $200. The 2013 profit announcement was fortuitous. Just weeks before, Tesla had been on the verge of bankruptcy.
Earlier in 2013 the company was struggling to turn preorders of its vehicles into actual sales. As Musk put his staff on crisis footing to save Tesla, he also began negotiating a deal to sell the company to Google through his friend Larry Page, the search giant’s co-founder and chief executive officer, according to two people with direct knowledge of the deal. Tesla spokesman Ricardo Reyes and Google spokeswoman Rachel Whetstone declined to comment. “I don’t want to speculate on rumors,” Page said when I asked him if Google had considered buying Tesla, adding that a “car company is pretty far from what Google knows.”
Although Tesla spent several years designing and building its flagship Model S, the car was still missing some features when it went on sale in June 2012. Its safety elements, software, and interior room were better than those of most luxury cars, but it didn’t offer the parking sensors and radar-assisted cruise control of rivals like BMW and Mercedes-Benz. Glitches with the 2012 Model S door handle irked early buyers, as did some aesthetic choices such as the car’s sun visors, which had unsightly seams.
A big part of the problem was a lack of resources, says former Tesla engineer Ali Javidan. “It was either hire a team of 50 people right away to make one of these things happen, or implement things as best and as fast as you could.” Musk chose the latter, Javidan says. Tesla also struggled to get top-rate suppliers to take it seriously, says chief designer Franz von Holzhausen. With the sun visors, he says, “We ended up having to go to a third-rate supplier and then work on fixing the situation after the car had already started shipping.”