Tesla was "going bankrupt" in 2018. It now holds $44 billion in cash

In the spring of 2018, Tesla (TSLA) was building far fewer Model 3s than promised. It was burning cash, and its credit rating was slipping deeper into junk. Eight years later, the company that critics said was heading for bankruptcy delivered 486,532 cars in a single quarter. That's nearly double what it delivered in all of 2018. It also ended 2025 with $44.1 billion in cash and investments.

The skeptics didn't simply lose, though. Some of their warnings came true, and Elon Musk later said one of them came closer than anyone knew. With Tesla due to report third-quarter results on October 21, here's what was predicted in 2018 and what the numbers show now.

How bad 2018 really looked

The trouble started with the Model 3, the car meant to take Tesla from niche maker to mass producer. At the first handovers in July 2017, Musk warned reporters: "We're going to go through at least six months of manufacturing hell". More than 500,000 people had reserved the car, and Tesla was aiming to build 500,000 vehicles the following year.

It didn't come close. On March 27, 2018, Moody's cut Tesla's corporate rating from B2 to B3, pointing to "the significant shortfall in the production rate" of the Model 3. The agency said Tesla faced "liquidity pressures due to its large negative free cash flow" with convertible bonds of $230 million due in November 2018 and $920 million due in March 2019. Moody's estimated Tesla needed about $2 billion that year just to fund operations through the ramp. At the end of 2017 it had $3.4 billion in cash.

The stock fell to a one-year low the next day. Musk answered on April Fools' Day with a joke tweet saying Tesla had gone bankrupt. Not many investors were laughing.

The second quarter of 2018 brought a net loss of $717.5 million, and the quarter ended with $2.24 billion in cash. Tesla said in its shareholder letter that building 7,000 cars a week "should enable Tesla to become sustainably profitable for the first time in our history". That was a promise, not a result.

The tweet that made everything worse

Then, on August 7, 2018, Musk tweeted that he could take Tesla private at $420 a share and that funding had been secured. The stock jumped more than 6%.

According to the Securities and Exchange Commission, the deal was "uncertain and subject to numerous contingencies," and Musk hadn't discussed price or other specific terms with any potential financing partner. Within weeks, Musk and Tesla agreed to pay $20 million each. Musk also gave up the chairman's seat for at least three years, and the board added two independent directors.

This is where critics have the strongest claim to being right. In a separate shareholder lawsuit, Judge Edward Chen had already ruled the tweets false and reckless before the case reached a jury. In February 2023 that jury cleared Musk and Tesla of liability for investor losses. Musk testified that he believed he had a handshake deal with Saudi Arabia's Public Investment Fund, which later backed away. Being cleared of liability isn't the same as being accurate. On the facts, the tweet was wrong.

What the bears predicted, in their own words

The sharpest public bet against Tesla came from hedge fund manager David Einhorn of Greenlight Capital. In his investor letter of October 5, 2018, he compared Tesla to Lehman Brothers, the bank whose 2008 collapse he had warned about. "Like Lehman, we think the deception is about to catch up to TSLA," he wrote, adding that Musk's "erratic behavior suggests that he sees it the same way". His argument was that Model 3 costs were higher than management admitted and that Tesla was avoiding a capital raise it needed.

Einhorn wasn't alone. Short sellers, who borrow shares and sell them hoping to buy them back cheaper, held about 19% of Tesla's shares at the start of 2020. That's a very large bet against one company.

What happened next: the 2018 turnaround

The collapse never came, and the first sign was the timing of Einhorn's letter. Less than three weeks later, Tesla reported third-quarter 2018 net income of $312 million and free cash flow of $881 million, and cash rose to $3.0 billion. Model 3 output averaged about 4,300 cars a week through that quarter.

Skeptics did have a fair point about where some of that profit came from. Tesla booked $52 million from selling zero-emission vehicle credits in the quarter. Those are regulatory credits that other automakers buy to meet emissions rules, and they cost Tesla next to nothing to produce. They didn't explain away a swing from a $717.5 million loss to a profit in one quarter, though.

Tesla delivered 245,240 vehicles in 2018, which the company said was almost as many as in all of its prior years combined.

The short sellers' bill came due in 2020. According to S3 Partners data reported by CNN, people betting against Tesla lost $40.1 billion that year as the stock rose 743%. That was more than the short losses on the next nine companies combined.

Then and now, by the numbers

Here's the comparison that matters most, using Tesla's own filings.

• Deliveries: 245,240 in 2018. In 2025: 1,636,129. In the third quarter of 2026 alone: 486,532.
• Profit: a $717.5 million loss in the second quarter of 2018. Net income of $3.79 billion in 2025.
• Cash: $2.24 billion at mid-2018. $44.1 billion in cash and investments at the end of 2025.
• Cash generation: $14.7 billion of operating cash flow in 2025 and $6.2 billion of free cash flow, meaning cash left after capital spending.

Tesla also has a business that barely registered in 2018 debates: big batteries for the grid. It deployed 46.7 gigawatt-hours of energy storage in 2025, up from 31.4 the year before, and another 13.7 gigawatt-hours in the third quarter of 2026.

On the core question critics raised in 2018, whether Tesla could survive and fund itself, the answer is yes. A company that generated $6.2 billion of free cash flow last year and holds $44.1 billion in cash and investments isn't one month away from anything.

Where the skeptics still have a case

That's not the whole picture. Tesla's deliveries fell from 1,789,226 in 2024 to 1,636,129 in 2025, a drop of about 9%.

Revenue slipped from $97.7 billion to $94.8 billion, and net income almost halved, from $7.09 billion to $3.79 billion. Automotive gross margin, the share of car revenue left after the cost of building them, eased to 17.8% from 18.4%.

2026 has been steadier but not a rebound. Third-quarter deliveries rose 1% from the second quarter but fell 2% from a year earlier. Production in the third quarter was 464,391 cars, below deliveries, as Tesla worked down inventory.

Then there's Musk's track record on timelines, which is the critics' oldest complaint. In 2019 he said: "Next year for sure, we will have over a million robotaxis on the road". By the end of 2020 there were none. The "six months" of production hell also ran longer than Musk first said. Looking back in November 2020, he called the stretch from mid 2017 to mid 2019 "production & logistics hell".

That same post settles one argument from 2018. Asked how close Tesla came to bankruptcy, Musk replied: "Closest we got was about a month". In other words, the bears weren't imagining the danger. They were wrong about how it would end.

So who called it?

The fair verdict is split. Moody's was right that Tesla's cash position was fragile and that the Model 3 was far behind schedule. The SEC was right that "funding secured" lacked a basis in fact. Einhorn's "deception" thesis is harder to defend: the profit and cash flow he doubted showed up in the next filing.

What almost nobody predicted in 2018 was the scale. A company that couldn't build 5,000 Model 3s a week now delivers close to half a million cars a quarter. Even so, it's selling fewer cars than it did two years ago and earning far less. That's a different problem from the one critics described. It's the problem of a large, maturing automaker, not a startup about to fail.

What to watch

Tesla reports third-quarter 2026 earnings after the market closes on Wednesday, October 21. The numbers to look at are automotive margins, how much of profit comes from regulatory credits and energy storage, and whether free cash flow holds up after last year's $6.2 billion.

The 2018 bears asked whether Tesla would survive. The 2026 question is whether it can grow again. Which of today's warnings about Tesla do you think will look as wrong, or as right, by 2034?