2008 was the year SpaceX reached orbit for the first time on its fourth launch, and also the year Tesla's money nearly ran out. On December 23, NASA signed a major contract with SpaceX, and on the 24th Tesla is reported to have completed its year-end fundraising just in time.
December 24, 2008. Christmas Eve, 6 p.m.
Years later, Elon Musk wrote down this exact time. "If it had been two days later, we couldn't have paid salaries." (This is a press quotation of his own social-media post, not confirmed in records from the time.)
In 2008, Musk was carrying a burden that an ordinary executive could not bear even for one company, for two companies at once. A rocket company and an electric-car company. And the world was in the middle of a financial crisis.
This article looks at that one year, following the dates.
First half: SpaceX on the brink
The first half of 2008 was a hard time for SpaceX. On August 2, Falcon 1's third launch failed: three failures in a row (for details, see the previous article).
Even so, on August 6, it was reported that $20 million was raised from the venture capital firm Founders Fund. Only four days after the failure.
Then, on September 28, the fourth launch took Falcon 1 into Earth orbit for the first time. SpaceX had, for the moment, come back from the brink.
The other company: Tesla
Yet in that same year, 2008, another company was quietly being cornered: the electric-car maker Tesla.
On October 15, according to press reports, Tesla announced the following.
- Mass production of its next car, the Model S, would be postponed.
- To cut costs, it would reduce staff and close overseas sites.
- And Musk would become CEO (chief executive officer) (while also remaining chairman). The CEO until then was Ze'ev Drori.
The Los Angeles Times at the time reported the announcement as an effect of the global credit crunch. It was an era when the people who lend money suddenly all disappeared.
November: a financing is approved
On November 2, Tesla's board approved a financing of about $40 million (according to Tesla's own official announcement). It was raised as convertible notes, and the main use was said to be accelerating production of the Roadster (its first production car).
But this approval does not mean "the money came in." Only after approval, when people actually appear who invest, does it become funds.
Year-end: about $9 million in cash
At the end of 2008, Tesla's cash is later reported to have been tight, down to about $9 million (a 2009 TechCrunch article).
Developing and producing cars sends out large sums every month. Nine million dollars was far too thin a margin to keep a company running.
December 23: news from NASA
A little earlier, on December 23, NASA announced contracts for delivering cargo to the International Space Station (ISS), and SpaceX was one of the two companies chosen.
- SpaceX: 12 flights, about $1.6 billion.
- The other company, Orbital Sciences: 8 flights, about $1.9 billion.
This is thought to have been news that decided whether the company lived or died. But there is one thing to be careful about here.
$1.6 billion is the total contract value. It does not mean the whole amount came into SpaceX in cash in December, when the contract was decided. It is money paid over a long period, as rockets are flown many times and cargo is carried.
December 24, 6 p.m.
And then, December 24.
Tesla is reported to have completed the last round of its year-end fundraising. Musk later looked back on it as follows (press quotations of his own social-media posts).
- The fundraising closed at 6 p.m. on December 24.
- If it had been two days later, they could not have paid salaries.
- At that point he put the last of his own funds from PayPal into Tesla.
A caution is needed here. The contents of this December 24 fundraising (who put in how much) could not be confirmed in records from the time. We also do not know how the roughly $40 million approved in November relates to the round completed on December 24. So we cannot assert that "$40 million was deposited on December 24."
Elsewhere, Musk is reported to have called 2008 a "nightmare year." SpaceX had launched three times and failed all three. Tesla's fundraising was also on the verge of collapse. The world was in the midst of a financial crisis.
Why this year matters
2008 was the opposite of a situation where "even if you fail, there is still a next time." The rocket had failed three times, the company's cash had run out, and the world economy was chilling. And both companies made it through the year without collapsing. This fact is a major premise when thinking about the two companies' later paths. But many details of "how they got through it" are still not known from public materials.
From the next article, we look at how the two companies, having passed this crisis, began to move.
FAQ
How did Musk divide his funds between the two companies in 2008?
It has not been confirmed. There is testimony from Musk himself, but the breakdown of the amounts allocated to the two companies is not confirmed in materials.
Did the NASA contract save SpaceX?
The total contract value is reported as about $1.6 billion, but that is money paid over a long period. How much cash on hand increased as of December has not been confirmed.
Was Musk Tesla's CEO from the start?
No. In October 2008, he is reported to have taken over from Ze'ev Drori, who had been CEO until then.
Summary
- August: four days after its third failure, SpaceX's $20 million raise was reported. On September 28, success on the fourth.
- October 15: Tesla postponed Model S production and cut staff. Musk became CEO.
- November 2: Tesla's board approved a financing of about $40 million (official announcement).
- Year-end: Tesla's cash tightened to about $9 million (press report).
- December 23: NASA's contract with SpaceX, 12 flights, about $1.6 billion (contract total).
- December 24: Tesla completed its year-end fundraising (press quoting his later testimony; the breakdown is unconfirmed).
Next: How did the two companies that passed the crisis begin to move? On to the electric car Model S and the spacecraft Dragon.
Sources (checked 2026-10-11)
- VentureBeat, "Private rocket company SpaceX gets $20M from the Founders Fund" (August 6, 2008): https://venturebeat.com/business/private-rocket-company-spacex-gets-20m-from-the-founders-fund
- Gizmodo, "SpaceX Falcon 1 finally gets into orbit, makes history" (September 2008): https://gizmodo.com/spacex-falcon-1-finally-gets-into-orbit-makes-history-5056064
- Los Angeles Times, "Tesla feels credit crunch" (October 15, 2008): https://www.latimes.com/archives/blogs/money-company/story/2008-10-15/tesla-feels-credit-crunch
- Tesla Motors press release, "Tesla Motors receives $40 million financing commitment" (said to be dated November 2, 2008): https://ir.tesla.com/press-release/tesla-motors-receives-40-million-financing-commitment
- TechCrunch, "Tesla worth a half billion dollars after Daimler investment" (May 19, 2009; on cash at the end of 2008): https://techcrunch.com/2009/05/19/tesla-worth-a-half-billion-dollars-after-daimler-investment/
- Universe Today, "SpaceX and Orbital Sciences awarded ISS re-supply contract" (report on NASA's December 23, 2008 contract): https://www.universetoday.com/articles/spacex-orbital-sciences-awarded-iss-re-supply-contract
- Observer, "Elon Musk recalls Tesla's 2008 financial crisis on Twitter" (June 2021, quoting Musk's posts): https://observer.com/2021/06/elon-musk-recall-tesla-2008-financial-crisis-twitter/
This article is for learning about science, technology and corporate history, and is not investment advice. Facts and the author's interpretation are kept separate. Figures are AI-generated illustrations.