---
title: "Elon Musk’s Money Run for the Future of Tesla Starts Now—Here’s How He’ll Try to Pull It Off"
description: "Last week, CEO Elon Musk tweeted that he planned to privatize Tesla. The biggest question: Who is bankrolling his bid? On Monday, Musk started to answer."
date: "2018-08-13"
modified: "2018-08-13"
authors:
  - name: "Victor Tangermann"
    job_title: "Senior Editor"
    link: "https://futurism.com/authors/victor"
url: "https://futurism.com/the-byte/tesla-saudi-money"
categories:
  - "Advanced Transport"
  - "Elon Musk"
  - "Future Society"
  - "Tesla"
  - "The Industrialists"
tags:
  - "buyout"
  - "electric car"
  - "elon musk"
  - "privatization"
  - "Saudi Arabia"
  - "tesla"
  - "the digest"
---

# Elon Musk’s Money Run for the Future of Tesla Starts Now—Here’s How He’ll Try to Pull It Off

![](<https://futurism.com/wp-content/uploads/2018/08/elon-musk-private-saudi-funding.png>)
*\<em\>Image: \<a href="https://www.gettyimages.ca/license/855377410" target="\_blank"\>AFP Photo/Peter Parks/Getty Images/Pixabay/Victor Tangermann\</a\>\</em\>*

**SAUDI FUNDING SECURED.** Last week, Elon Musk announced that he planned to privatize electric car company Tesla. The company's CEO wrote on Twitter and, later in an [official statement](<https://www.tesla.com/blog/taking-tesla-private>), that he had secured funding (and no, it [wasn't a weed joke](<https://futurism.com/the-byte/elon-musk-taking-tesla-private>)).

Naturally, people had a lot of questions. Most notably: *who* was backing his bid? Is it Japanese conglomerate SoftBank, which held talks with Musk last year? ([No.](<https://www.bloomberg.com/news/articles/2018-08-12/softbank-is-said-to-shun-tesla-deal-amid-focus-on-other-car-bets>)) [Is it China](<https://www.wired.com/story/tesla-going-private/>)? Perhaps not.

https://twitter.com/elonmusk/status/1026872652290379776

Today, possibly in an effort to calm investors and [appease a probing Securities and Exchange Commission (SEC)](<https://www.wsj.com/articles/sec-has-made-inquiries-to-tesla-over-elon-musks-taking-private-tweet-1533757570?mod=hp_lead_pos1&ns=prod/accounts-wsj>), Musk started answering some of those questions. In [yet another update](<https://www.tesla.com/blog/update-taking-tesla-private?redirect=no>), published as a blog on the Tesla web site, Elon decided to be "completely forthcoming" by elaborating on his intentions and to clarify what exactly he meant with "funding secured."

Musk writes that he's been meeting with Saudi investors since the "beginning of 2017" to discuss taking Tesla private. And unsurprisingly, they had "more than enough capital needed to execute on such a transaction." Translation: they're rich as hell, and buying Tesla is well within their means.

Musk's post directly conflicts with [a report published Saturday by *Reuters*](<https://www.reuters.com/article/us-tesla-musk-saudi-exclusive/exclusive-saudi-arabias-pif-has-shown-no-interest-in-bankrolling-tesla-buyout-idUSKBN1KW0FA>) in which sources with knowledge of the people in charge of Saudi Arabia’s Public Investment Fund (PIF) "has shown no interest so far in financing Tesla."

But no matter who the buyer is, there are some logistical kinks to work out before the company can privatize.

**BUYOUT NITTY GRITTY.** Traditionally, whoever buys out a company would also take on that company's debt, and a traditional buyout (a "leveraged buyout") would pile on even more debt to those books. And about those books? A slightly [precarious situation](<https://www.bloomberg.com/news/articles/2018-04-06/hidden-by-model-3-mess-tesla-s-other-problem-is-about-to-emerge>), seeing as Tesla's got a whopping amount of debt ($10 billion and change). That's why Musk wants to fund any possible buyout with "mostly equity rather than debt."

It's why Musk suggests effectively shifting two thirds of Tesla's shareholders to a newly privatized Tesla using equity, not debt. If that scheme works the way Musk thinks it will, it would cost buyers a whole lot less than the estimated minimum [$70 billion](<https://www.forbes.com/sites/chuckjones/2018/08/09/elon-musks-82-billion-tesla-buyout-folly/#6e332e9d595c>) it would cost an investor to privatize the company (Musk did not clarify how much his equity-based buyout would actually end up costing).

Tesla is putting together a "special committee of Tesla's board" to crunch the numbers on how much it would cost to take the company private. Shareholders will then vote on any board-approved plan. Judging by the amount of debt Tesla is facing right now, a deal from the Saudi PIF (or, really, anyone else) could come as a big relief to the company's investors, who have long held on to their positions with the company despite what many doubters see as no clear paths towards profitability (let alone substantial relief of that debt through revenue) in the near future.

**READ MORE:** [Elon Musk Says Meetings With Saudis Preceded Tweet on Taking Tesla Private](<https://www.nytimes.com/2018/08/13/business/dealbook/tesla-elon-musk-saudi-arabia.html>)

***More on privatizing Tesla: [Turns Out Musk Might Actually Be Serious About Taking Tesla Private](<https://futurism.com/the-byte/elon-musk-taking-tesla-private>)***

## Author
I've been at Futurism since 2017, where my role has evolved to encompass design, writing, and increasingly editing. I've always been fascinated by space exploration and advanced transportation, which I've leaned into by interviewing luminaries in those fields while closely following the dimensions of policy and regulation that allow next-generation projects to succeed -- or, sometimes, to fail. I'm also keenly interested in the effects of generative AI on society, policies, and democratic institutions, as well as clean energy, physics and biology, and the vagaries of tech leadership. My work for Futurism has been cited by publications including Ars Technica, Gizmodo, PC Magazine, Jalopnik, Fox News, and the New York Post. I spent my childhood living in locations including Manila, the Philippines, and Geneva, Switzerland, attended McGill University, and now live in Toronto, Canada. Before Futurism I worked at AskMen and a small photography studio. In my free time, I'm an avid gardener, foodie, and craft beer lover, as well as a maker of artisanal hot pepper sauces. I have a magnificent dog named Freida.

### Author social links  
[Bluesky](<https://bsky.app/profile/vtanger.bsky.social>)