Elon Musk Recalls A Lunch Where Charlie Munger Listed All The Reasons Tesla Would Fail — 'Made Me Quite Sad, But I Told Him I Agreed…'

In 2009, Elon Musk found himself at a lunch with Charlie Munger, the legendary vice chairman of Berkshire Hathaway BRK BRK.B)). It wasn't exactly the kind of meeting that leaves you feeling inspired—at least not at first. Munger, known for his sharp investment mind and brutal honesty, laid out "all the ways Tesla would fail," as Musk later recalled.

Years later, Musk shared this moment on X in February 2022, writing:

"I was at a lunch with Munger in 2009 where he told the whole table all the ways Tesla would fail. Made me quite sad, but I told him I agreed with all those reasons & that we would probably die, but it was worth trying anyway."

I was at a lunch with Munger in 2009 where he told the whole table all the ways Tesla would fail.

Made me quite sad, but I told him I agreed with all those reasons & that we would probably die, but it was worth trying anyway.

— Elon Musk (@elonmusk) February 16, 2022

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That post wasn't just a nostalgic reflection—it was a testament to Musk's resilience. Imagine sitting across from one of the most respected investors of all time, hearing every logical reason why your company wouldn't make it. And yet, instead of backing down, Musk agreed with Munger's points but decided to push forward anyway. That decision, as history shows, paid off.

But it's important to note that Munger's skepticism wasn't rooted in a dislike for electric vehicles. In fact, he was a driving force behind Berkshire Hathaway's investment in BYD, a Chinese electric vehicle company. Back in 2008, Berkshire bought 225 million shares of BYD at around HK$8 per share—a bold move during a time of global financial uncertainty. Warren Buffett himself credited Munger for spotting the opportunity.  That investment turned out to be incredibly profitable, growing from $230 million to several billion over the years, even though Berkshire has since trimmed its holdings.

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As for Tesla TSLA, Munger's tune changed over time. In a 2022 interview with CNBC, he acknowledged just how wrong his initial skepticism had been. "I was certainly surprised that Tesla did as well as it did. Tesla has made some real contributions to this civilization… We haven't had a successful new auto company in a long, long time. What Tesla has done in the car business is a minor miracle," Munger said.

Musk responded with gratitude, simply saying, "Mr. Munger's words are much appreciated."

While it hasn't been disclosed exactly why  Munger thought Tesla would fail, the company did face some challenges early on. In 2013, Tesla was nearly out of cash and struggling with slow Model S sales, leading Musk to strike a handshake deal to sell the company to Google. Fortunately, a sudden sales surge turned things around, helping Tesla post its first quarterly profit and repay a $465 million government loan early. With the company back on track, Musk called off the deal—he no longer needed a savior.

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Now, with Munger no longer with us, his legacy lives on not just through his investments but through the countless lessons he imparted—lessons in both criticism and praise. While Berkshire Hathaway still holds a stake in BYD, it has reduced its position significantly over the past few years. But that doesn't change the fact that Munger's bold call back in 2008 helped shape the future of electric vehicles, even if he once doubted Tesla's chances.

And perhaps that's the real takeaway here: even the smartest minds can misjudge the future, but it's the willingness to admit it—and to learn from it—that truly matters.

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