How close did Google come to buying Tesla? (UPDATED)

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[Updated 5/10/15 to include Elon Musk’s comments on talks with Google. Originally posted 4/22/15.]

Since shortly after Tesla began its automotive adventures, folks have been speculating that the company might be acquired by one of the cash-rich technology giants, but more industry-savvy observers have generally poo-poohed the idea.

In a new biography of Elon Musk, author Ashlee Vance claims that, in 2013, Musk and his pal Larry Page actually began to negotiate a deal to sell the company to Google.

Nowadays, it’s hailed as the “Best Car Ever,” but when it went on sale in June 2012, the Model S was far from problem-free. As Vance writes in a Bloomberg-published excerpt from his new book (Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future), glitches with the door handles, substandard sun visors, and a lack of autonomy features disappointed some early buyers. “The word of mouth on the car sucked,” said Musk.

By the end of 2012, sales were stalling, and so many customers were deferring orders that the company quietly shut down production. In March 2013, according to “two people with direct knowledge of the deal,” Musk and Page discussed an arrangement in which Google would buy Tesla outright for several billion dollars. True to his holy vow to produce a mainstream electric car, Musk insisted that he remain at the helm for at least eight years, and that Google wouldn’t shut down the company before the third-generation vehicle was a reality.

While the negotiations continued, Tesla’s fortunes began to improve – sales quickly grew, the company reported a profit, and the rest is history. As its skyrocketing stock price provided plenty of capital, Tesla had no further need of a white knight, and broke off negotiations with Google.

The media had as much fun with this story as a tomcat with a catnip mouse, but reasons for skepticism soon surfaced. Tesla spokesman Ricardo Reyes refused to comment, and Larry Page said, “I don’t want to speculate on rumors…a car company is pretty far from what Google knows.”

“Bloomberg I think somewhat overstated the situation,” said Elon Musk in a recent interview with Nikkei (via Wall Street Journal). “I did have very informal discussions with Google, but it never came to the point where Google made an offer. The Bloomberg article made it sound like they made a $6 billion offer for Tesla. That is not the case.”

 

Source: Bloomberg via Green Car ReportsWall Street Journal