The Short but Fascinating History of Tesla
Tesla Motors has taken the electric vehicle (EV) and battery market by storm since its founding in 2003. Under the leadership of Elon Musk, it has diligently followed and completed its so-called "Secret Master Plan" to change the world of motoring forever.
Here, we explore some of the key milestones in the history of Tesla. We also attempt to answer some of the most commonly asked questions about the company.
Why is Tesla named after Nikola Tesla?
The choice of Nikola Tesla's name is pretty obvious - - he was, after all, one of the major pioneers in electricity. Tesla was also the genius behind the development of the AC electric motor that is used in, among many other things, Tesla cars.
But why did the company's founders choose his name?
According to Business Insider, the name was chosen by Tesla's co-founder Martin Eberhard. While discussing the idea of his new venture to his then-girlfriend (and now wife), Carolyn, Eberhard decided that the name suited perfectly to his vision of the company.
When choosing the name, Eberhard knew that he needed a strong brand name for his new company, a startup that was going to build electric cars with a difference.
He wanted the company to be a game-changer and the vehicles designed so well that they would alter the way everyone thought about EVs forever. But what name could they use to convey that message?
He'd been pitching company name ideas to his girlfriend for months. But nothing seemed to fit.
Eberhard was not interested in calling the firm anything that sounded too "green". Names that connoted primarily eco-friendliness simply didn't sound strong enough to him.
One day, while sitting down at the Blue Bayou restaurant at Disneyland, the idea struck him like a bolt of lightning. Why not name it in honor of Nikola Tesla?
After all, he invented the AC induction motor and the name was easy to remember.
His girlfriend replied: "Perfect! Now get to work making your car."
And so, on the 23rd of April 2003, Eberhard's cofounder Marc Tarpenning officially registered the domain name: Teslamotors.com. Now they just needed to build some cars.
How did Elon Musk start Tesla?
In short, he didn't. Tesla was founded by Martin Eberhard and Marc Tarpenning in 2003.
Elon Musk joined Tesla in 2004, after investing $6.3 million in Tesla stocks during a Series A round of investment. Musk was appointed to the position of Chairman of its Board of Directors.
Why was Tesla created?
Tesla, originally Tesla Motors, started out in 2003 when a group of engineers, who had a passion for electric cars, wanted to show people that they didn't need to compromise when considering buying one.
They strived to develop their own range of cars that could be, in the company's words, "better, quicker and more fun to drive than gasoline cars."
One of the main motivations for starting Tesla was the recent retirement of the General Motors EV1 program. General Motors ran this program for only three years between 1996 and 1999 and produced a limited run of cars.
The vehicles were never released for public purchase, but were considered a great success from an engineering point of view.
Inspired by this, Tesla Motors' founding engineers, Martin Eberhard and Marc Tarpenning began the company in July of 2003. They became Tesla's CEO and CFO respectively.
The pair funded the startup themselves until the company opened up for Series A funding from external investors.
Musk was already a successful entrepreneur at the time, and had made his fortune working for PayPal. He helped lead the Series A funding and invested millions of his own capital, becoming the company's chairman.
The following year, Lotus signed a contract with Tesla to help design the chassis and bodywork for Tesla's first model, the Roadster.
In a 2006 Series B funding round, Google's founders Sergey Brin and Larry Page also invested in Tesla. In July that year, the first prototype of the Roadster was unveiled to the world.
Shortly after, Tesla published its "secret" plan for the company:
"Build a sports car. Use that money to build an affordable car. Use that money to build an even more affordable car. While doing the above, also provide zero-emission electric power generation options.” - Elon Musk/Tesla.
The company was well on its way to disrupting the automotive industry.
When was the first Tesla car made?
In 2006, Tesla unveiled the prototype for its first venture into the EV market, the Roadster. After a few more years of development, the final production model was launched in 2008.
At this time, both of the original founders had left the company and Micahel Marks had stepped in as temporary CEO. Shortly after, Ze'ev Drori took over as Eberhard's permanent replacement, in November of 2007.
Drori would be the man to bring the Roadster to market in the following year.
This mean-looking sports car came with cutting-edge battery technology and an all-electric powertrain. The vehicle officially went into production in March of 2008.
The Roadster was not only an amazing achievement for such a young company, but also proved to be something no other company had ever succeeded in creating. Tesla had produced an entirely electric car with practical specifications that could actually meet consumer needs, albeit at a price that few could afford.
Many before them had failed because, among other things, they had not been able to produce a battery with enough power to be practical for everyday driving, or a cost-effective motor capable of fitting inside a consumer vehicle and accelerating to highway speeds.
The Roadster did all of those things.
Early Roadster models could travel a total of 250 miles (402 km) on a single charge, and had an acceleration comparable to other consumer sports cars of the day. It had a lithium-ion battery that was common in many electronic devices, and which enabled customers to recharge the car using a standard wall outlet.
With a price tag of over $100,000 apiece, the Roadster was very much a luxury product. Although, as we have seen, that was all part of the "Master Plan".
Tesla had also hit something of a wall when it came to charging time. The original Roadsters required between 24 and 48 hours to recharge its batteries using a standard home outlet -- this would not do.
If EVs, especially Teslas, were to realistically challenge vehicles with conventional combustion-engines, charging speeds would need to be reduced, a lot. This would become a matter of some urgency for the company over the following years.
Even today, it can take more than an hour to fully recharge some Tesla model batteries. Although for newer models, Tesla's V3 Supercharging stations have got charging time down to about 5 minutes for enough charge to travel around 75 miles.
This is still not fast enough, however, when you consider that a conventional gasoline-powered vehicle can be refueled in around the same amount of time, but travel much further.
Financial troubles hit and Musk takes the helm
Orders were coming in, with some customers even willing to spend extra to jump to the front of the waiting list. Everything seemed rosy on the surface, but the company was in financial trouble.
The first Roadster model was delivered to Elon Musk, and co-founders Eberhard and Tarpenning finally left Tesla entirely. Not long after, in October 2008, Musk took over as CEO of the company and fired 25% of the company's staff.
This change in leadership was not plane sailing, however. Eberhard and Tarpenning filed a lawsuit in 2009 against Musk and their former company, accusing Musk of forcing them out of the company they had founded.
The case included allegations of libel and slander with Eberhard, in particular, feeling that he had been unfairly blamed for the delays, and subsequent financial problems, associated with bringing the Roadster to market.
The lawsuit was dropped the same year, but the company was still close to ruin. It had a mere $10 million cash in hand, which was potentially less than what was needed to fulfill and deliver the existing orders for cars.
Daimler came to the company's rescue in May of 2009, when they bought a 10% stake in the company for $50 million. The cash infusion gave Tesla a brief respite from a potential disaster.
Soon after, Tesla secured a massive $465 million loan from the U.S. Department of Energy. This gave the company the much-needed capital they needed for longer-term survival and its headquarters relocated to Palo Alto.
When did Tesla go public?
A major event in the history of Tesla was when they finally went public in June of 2010. Opening on the NASDAQ at $17 a share, Tesla raised $226 million in its IPO.
"From there, Tesla designed the world’s first-ever premium all-electric sedan from the ground up – Model S – which has become the best car in its class in every category.
Combining safety, performance, and efficiency, the Model S reset the world’s expectations for what an EV can achieve. The vehicle had the longest range of any commercial EV at the time, over-the-air software updates that improved performance automatically, and a record 0-60 mph acceleration time of 2.28 seconds, as measured by Motor Trend.
At just over $75,000 apiece, the Model S sedan would be Tesla's next step in the "Master Plan" to produce a cheaper alternative to the Roadster. When the first prototype was revealed in 2011, it was an event that would come to characterize the company for years to come.
The Model S went into full production in 2012.
The Tesla Model S was widely praised on its launch, and received awards from several automotive and environmental publications.
The car had a range of up to 300 miles (483 km), and a much-reduced charging time. With the Model S released, Tesla discontinued the production of the Roadster to focus on its new line of sedans.
2012 also saw the emergence of Tesla's freestanding "Supercharger" charging stations. Initially, there were just six stations, all in California, but this would gradually be expanded to 1000s worldwide over the years to come.
Tesla made its first quarterly profit in 2013, and the first Tesla Gigafactory in Nevada was announced the following year. The Gigafactory is Tesla's main facility for producing car batteries, and would prove to be the linchpin of Tesla's entire business model.
Tesla has also ventured into the sustainable energy sector. By developing the Powerwall, Powerpack, and Solar Roof, the company hopes to enable homeowners and businesses to generate and store their own electricity.
Tesla builds its first Gigafactory
By 2015, the company had expanded its offerings with the Model X. According to Tesla, this vehicle was the, "safest, quickest and most capable sport utility vehicle in history that holds 5-star safety ratings across every category from the National Highway Traffic Safety Administration." - Tesla.
Tesla also began the development of its semi-self-driving system in some of its vehicles. This would be the first step in a mission to make Tesla vehicles fully self-driving.
The Tesla Model 3 was introduced in 2016, in line with the company's "Master Plan". This was a lower-priced, high-volume electric vehicle, which went into full production in 2017.
Around this time, Tesla Motors officially changed its name to Tesla Inc., in a move designed to more accurately represent its diversification away from solely producing automobiles.
Shortly after the announcement of the Model 3 sedan, Musk would publicly declare that Tesla could deliver up to 200,000 vehicles in the second half of 2017. This was a bold claim, as it would require a four-fold increase in productivity for the company.
This would not be the last time that Musk would make such sweeping public statements -- some of which would land Tesla (and Musk personally) into some hot water.
2018 go off to a rocky start for Tesla
2018 did not start too well for Tesla. After the company missed some of its financial predictions, investors started to sell-off Tesla stock en masse, and the company lost 5% of its value of just over $10 billion.
Model 3 sedans were also being produced at only a fraction of the rate Musk had previously set, and the company managed to ship just under 2,500. This was despite claims they could roll out 5,000 vehicles a week.
Tesla blamed supply chain issues for the Model S's sluggish production.
In August of the same year, Musk became embroiled in controversy when he tweeted that he would take the company private once Tesla stock hit $420. This excited the market and investors raced to grab shares while the going was good.
This also triggered an SEC investigation, and Musk was accused of releasing false and misleading information in order to artificially inflate Tesla's stock prices. The claims were dismissed by Musk, who even threatened to resign from the company.
Tesla, and Musk, eventually accepted an agreement with the SEC and paid a $20 million fine. Musk also decided to step down from his position as the chairman of the board.
Musk was replaced as director by Robyn Denholm, a board member of the company, but remained CEO. The Department of Justice (DOJ) in September of 2018 also launched an investigation into Musk's allegedly misleading information on the production capacities of the Model S sedan.
February 2019 saw the SEC also file a motion for contempt, that led to an amendment to Musk and Tesla's original settlement with the SEC. The new agreement requires active oversight of Musk's Twitter account, by the company's attorneys.
One of the next major events in Tesla's history was the launch of one of its Roadsters into space.
Shortly after, they unveiled their EV Tesla truck - the Tesla Semi.
The Tesla Model Y SUV fulfills Tesla's "Master Plan"
In March of 2019, Tesla unveiled its Model Y SUV. This car is the final step in the company's "Master Plan" to bring an "even-cheaper" EV to the masses.
Later in 2019, Tesla revealed its Cybertruck concept vehicle. Its futuristic design really did blow minds. Intended to be a pick-up truck, the Cybertruck is designed to look like something borrowed from the future.
At around the same time, Tesla announced that it would be building its Gigafactory 4 near Berlin, Germany. Construction began in 2020 and the factory is expected to produce almost half a million vehicles a year when at full production.
January of 2020 started out with some excellent news for Tesla, as the company announced it had delivered a record 367.500 vehicles in 2019.
"And this is just the beginning. With Tesla building its most affordable car yet, Tesla continues to make products accessible and affordable to more and more people, ultimately accelerating the advent of clean transport and clean energy production.
Electric cars, batteries, and renewable energy generation and storage already exist independently, but when combined, they become even more powerful – that’s the future we want." - Tesla.
After a rocky first few years, Tesla has secured a significant share of the EV market, reaching around 12% of global EV sales but closer to 75% of US EV sales in 2019. The company is also expanding its manufacturing facilities worldwide, as well as growing its supercharging station network.
With the company finally in profit and expanding, will the company be successful in its grand ambitions?
Only the future will tell.
This project aims to use olivine, a carbon-capturing mineral, to naturally capture billions of atmospheric carbon dioxide and with the power of the oceans.