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Text comes from the book: "Elon Musk: How Elon Musk changed the world - The Biography" (2015), published by Münchener Verlagsgruppe (MVG), reprinted with the kind permission of the publisher.

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vanceAshlee Vance is a journalist for the New York Times and CNN, among others. Vance, born in South Africa, is an American business journalist. He wrote, among other things. for the New York Times, The Economist, the Chicago Tribune,, and the International Herald Tribune. He is one of the most famous journalists at Bloomberg BusinessWeek and has written countless cover stories about Elon Musk, Mark Zuckerberg and Steve Ballmer. All texts by Ashlee Vance.

Overcoming crises with courage instead of anger like Tesla: on the verge of bankruptcy

Miscalculations and high costs can Company to the brink of bankruptcy. Tesla has shown how to overcome crises with courage and skill.

tesla elon-musk-bankrupt

Saving and spending money

In terms of personnel costs, Tesla had saved quite cleverly since it was founded - but not in terms of technology and materials. That soon took revenge. Instead of skilled engineers who probably wouldn't have worked really hard for $ 120.000 a year, the company hired fresh Stanford graduates for $ 45.000.

When it comes to technology and materials, however, Tesla was terrifyingly willing to spend. Nobody liked the in-house software that was supposed to be used to record materials invoices, so some people used it and some didn't - and those who did often made it hard Error.

Costs poorly calibrated

So sometimes they just took the cost of parts for the prototypes and estimated how much cheaper they would be if you bought them in bulk instead of getting specific offers for them.

The software once stated that each roadster would cost $ 68.000, which would have meant a profit for Tesla of around $ 30.000 apiece. Everyone knew this number was wrong, but it was passed on to the board anyway. In about mid-2007, Watkins contacted Musk with his observations.

When the numbers ruin relationships

He was prepared for bad numbers, but confident that costs would decrease significantly over time through optimization of the production process and increasing sales. "Then Tim had seriously bad news for me," he says. It looked like each roadster would cost up to $ 200.000 to produce - and Tesla wanted it for only around $ 85.000 sell. "Even at full production volume, it would have been about $ 170.000 or something insane," says Musk. "Of course that wasn't that important because every third car just fucking didn't work anyway."

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Eberhard and Musk had argued about some design issues for the car for years, but overall they got along well. Neither of them could stand stupid people, and they certainly shared many visions of battery technology and its significance for the world. The cost of the roadster, as determined by Watkins, was too much for their relationship.

The deposition of the CEO

To Musk, it looked like Eberhard had made serious management mistakes by making the cost of the parts so high. Then, in Musk's eyes, he had tried to hide the difficult situation from the board, which in principle was fraud against the company. Eberhard received a call from Musk on his way to address the Motor Press Guild in Los Angeles. In a short, ugly conversation, he learned that he would be replaced as CEO.

In August 2007, the Tesla board deposed Eberhard as CEO and made him president for technology, which only exacerbated the problems. "Martin was so bitter and annoying," says Straubel. "I still remember how he walked through the office and spread dissatisfaction while we were trying to get the car ready, money was running out and everything was on a knife edge." which made it difficult to record the costs exactly.

The problems are increasing

He also believed that Watkins made the situation worse than it actually was. Startups in Silicon Valley see chaos as a normal mode of operation. "Valor was more used to older companies," says Eberhard. “They found a mess and couldn't do anything with it. But it was just the typical chaos at a start-up. ”Apart from that, Eberhard had already asked the board to replace him as CEO and to find someone with more production experience.

As 2007 went by, Tesla's problems increased. The carbon fiber body, which was so nice to look at, turned out to be extremely difficult to paint.

A complete restart

And Tesla had to try several companies to find one that did the job well. Sometimes there were faults in the battery packs and occasionally short circuits occurred in the motor.

There were visible gaps between the body panels. The company also had to come to terms with the reality that there would be no two-speed transmission. In order to still have the roadster accelerate from 0 to 100 quickly enough, the engineers had to redesign the motor and inverter and save some weight. "We basically had to do a complete restart," says Musk, "it was horrible."

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