Tesla, Inc. is an electric vehicle manufacturer and clean energy company founded in San Carlos, California in 2003 by American entrepreneurs Martin Eberhard and Marc Tarpenning. The company is named after Serbian-American inventor Nikola Tesla. Tesla is the world's leading electric vehicle manufacturer by market cap. As of 2023, Tesla's global vehicle sales were 1.77 million units annually, the 14th-highest total among auto manufacturers worldwide.
The beginnings – Roadster and private funding Tesla was incorporated (as Tesla Motors) on July 1, 2003, by Martin Eberhard and Marc Tarpenning in San Carlos, California. The founders were influenced to start the company after General Motors recalled all its EV1 electric cars in 2003 and then destroyed them, and seeing the higher fuel efficiency of battery-electric cars as an opportunity to break the usual correlation between high performance and low fuel economy in automobiles. The AC Propulsion tzero also inspired the company's first vehicle, the Roadster. Eberhard said he wanted to build "a car manufacturer that is also a technology company", with its core technologies as "the battery, the computer software, and the proprietary motor".
Ian Wright was the third employee, joining a few months later. The three went looking for venture capital (VC) funding in January 2004 and connected with Elon Musk, who contributed US$6.5 million of the initial (Series A) US$7.5 million round of investment in February 2004 and became chairman of the board of directors. Musk then appointed Eberhard as the CEO. J.B. Straubel joined in May 2004 as the fifth employee. A lawsuit settlement agreed to by Eberhard and Tesla in September 2009 allows all five (Eberhard, Tarpenning, Wright, Musk and Straubel) to call themselves co-founders.
Musk took an active role within the company and oversaw Roadster product design, but was not deeply involved in day-to-day business operations. Musk insisted from the beginning on a carbon-fiber-reinforced polymer body and contributed to the car style. Tesla Motors received the Global Green 2006 product design award for the design of the Tesla Roadster, presented by Mikhail Gorbachev. Elon Musk, Martin Eberhard, Barney Hatt, Tesla Motors also received the 2007 Index Design award for their design of the Tesla Roadster.
Musk consistently maintained that Tesla's long-term strategic goal was to create affordable mass market electric vehicles. Tesla's goal was to start with a premium sports car aimed at early adopters before moving into more mainstream vehicles including sedans and affordable compacts.
In February 2005, Musk led Tesla's Series B investment round which added Valor Equity Partners to the funding team. Musk co-led the third, round in May 2006 along with Technology Partners. This round included investment from prominent entrepreneurs including Google co-founders Sergey Brin & Larry Page, former eBay President Jeff Skoll, Hyatt heir Nick Pritzker and added the VC firms Draper Fisher Jurvetson, Capricorn Management, and The Bay Area Equity Fund managed by JPMorgan Chase. Musk led the fourth round in May 2008 which added another US$400,167,530 in debt financing, and brought the total investments to over US$100 million through private financing.
Also in the 2006 "Tesla master plan" a partnership with SolarCity was announced to co-market photovoltaic solar panels, which could be installed on the roof of a carport, allowing those who drive less than 350 miles/week to become "energy positive" with respect to personal transport.
Eberhard served as CEO until he was asked to step down from the position in August 2007 by the board of directors. Eberhard then took the title of "President of Technology" before ultimately leaving the company in January 2008. Co-founder Marc Tarpenning, who served as the Vice President of Electrical Engineering of the company, also left the company in January 2008. In August 2007, Michael Marks was brought in as interim CEO, and in December 2007, Ze'ev Drori became CEO and President. In January 2008, Tesla fired several key personnel who had been involved from the inception after a performance review by the new CEO. According to Musk, Tesla was forced to reduce the company workforce by about 10% to lower its burn rate, which was out of control in 2007. In May 2008, "The Truth About Cars" website launched a "Tesla Death Watch", as Tesla needed another round of financing to survive. In October 2008, Musk succeeded Drori as CEO and fired 25% of Tesla employees. Drori became vice-chairman, but then left the company in December 2008. In December a fifth round of investment turned into debt financing and added another , avoiding bankruptcy.
By January 2009, Tesla had raised and delivered 147 cars. Musk had contributed of his own money to the company. On May 19, 2009, Germany's Daimler AG, maker of Mercedes-Benz, acquired an equity stake of less than 10% of Tesla for a reported . According to Musk, the Daimler investment saved Tesla. In July 2009, Daimler announced that Abu Dhabi's Aabar Investments bought 40% of Daimler's interest in Tesla.
2009 Department of Energy loan In June 2009, Tesla was approved to receive in interest-bearing loans from the United States Department of Energy. The funding, part of the Advanced Technology Vehicles Manufacturing Loan Program, supported engineering and production of the Model S sedan, as well as the development of commercial powertrain technology. The low-interest loan program was created in 2007 during the George W. Bush administration, and is not related to the "bailout" funds that GM and Chrysler received, nor are they related to the 2009 economic stimulus package. Tesla repaid the loan in May 2013, with a US$12 million interest. Tesla was the first car company to have fully repaid the government; Nissan repaid their loan in 2017, while Fisker went bankrupt and defaulted on their loan.
The company announced in early August 2009 that it had achieved overall corporate profitability for the month of July 2009. The company said it earned approximately on revenue of . Profitability arose primarily from improved gross margin on the 2010 Roadster, the second iteration of Tesla's award-winning sports car. Tesla, which like all automakers records revenue when products are delivered, shipped a record 109 vehicles in July and reported a surge in new Roadster purchases. In September 2009, Tesla announced a round to accelerate Tesla's retail expansion. Daimler participated in the round to maintain equity ownership from its initial investment.
Lotus supply of Roadster parts Tesla Motors signed a production contract on July 11, 2005, with Group Lotus to produce "gliders" (complete cars minus powertrain). The contract ran through March 2011, but the two automakers extended the deal to keep the electric Roadster in production through December 2011 with a minimum number of 2,400 units, when production ended, mostly because of tooling changes orchestrated by one of its suppliers. In June 2010, it was reported that Tesla sold a total of zero emission vehicle credits to other automakers, including Honda, up to March 31, 2010.
IPO and Model S On January 39, 2010, Tesla Motors filed Form S-1 with the U.S. Securities and Exchange Commission, as a preliminary prospectus indicating its intention to file an initial public offering (IPO) underwritten by Goldman Sachs, Morgan Stanley, J. P. Morgan, and Deutsche Bank Securities. On May 21, 2010, Tesla announced a "strategic partnership" with Toyota, which agreed to purchase in Tesla common stock issued in a private placement to close immediately after the IPO. Executives at both companies said that they would cooperate on "the development of electric vehicles, parts, and production system and engineering support." Less than two months later, Toyota and Tesla confirmed that their first platform collaboration would be to build an electric version of the RAV4 EV. In October 2014, both Daimler and Toyota sold their holdings of Tesla shares with a combined profit of over US$1 billion.
On June 29, 2010, Tesla Motors launched its initial public offering on NASDAQ. 13,300,000 shares of common stock were issued to the public at a price of US$17.00 per share. The IPO raised for the company. It was the first American car maker to go public since the Ford Motor Company had its IPO in 1956, and by 2014 Tesla had market value half that of Ford. In early 2013, Tesla had problems producing the Model S, and was running out of money. Musk proposed a US$11 billion deal with Google, but improved production and a sales push gave Tesla its first profitable quarter, and the deal was abandoned.
During November 2013, following news of a third Model S fire, Tesla's stock fell more than 20 percent. All of those Model S fires had developed several minutes after the cars had struck significant road debris at high speeds and all of the vehicles had provided warnings to the occupants of serious battery damage, advising that an immediate stop was required. All three owners ordered new Model Ss. In the following months Tesla developed a battery protection system as a no-cost retrofit to all Model Ss. No further regulatory action was taken, although there have been a few incidents since, most recently January 2016, with a Model S charging at a Norwegian Supercharger station. Despite the drop in stock price, Tesla was still the top performer on the Nasdaq 100 index in 2013. Tesla was seeking to sell 40,000 electric vehicles worldwide in 2014, adding China, Hong Kong, Japan, and Australia to the list of countries where it exports cars, but in November 2014 Tesla reduced its guidance on sales down to 33,000 units for 2014. As of the 2014 model year, Tesla had a US Corporate Average Fuel Economy (CAFE) of 276.7 MPG.
Tesla's production of cars began at the Tesla Factory in Fremont, California. In October 2015, Tesla Motor announced the company was negotiating with the Chinese government on producing cars in China. Local production in China has the potential to reduce the sales prices of Tesla models by a third; however, foreign automakers are generally required to establish a joint venture with a Chinese company to produce cars domestically. Elon Musk clarified at that time that production will remain in the U.S. in the foreseeable future, but if there's sufficient local demand for the Tesla Model 3 in China, a factory could be built in the country as soon as a year after the launch of the new model. Production in Europe will also depend on the region's demand for the Model 3. Tesla was also considering building a manufacturing plant in India, according to Tesla's Chief Information Officer, Jay Vijayan. This would help Tesla to avoid 100% import duty which is applicable on import of CBU (Completely Built Unit) cars in India. Tesla was also considering building a battery plant in India. "Given high local demand, a Gigafactory in India would probably make sense in the long term," Musk said in response to a specific question about whether he would consider a factory in India too.
Tesla announced in November 2015 that during the third quarter of 2015 it produced a record 13,091 vehicles, and also revised its target sales for 2015 to between 50,000 and 52,000 vehicles, including both of its models available for retail sales. The company expects to achieve an average production and deliveries of 1,600 to 1,800 vehicles per week for Model S and Model X combined during 2016, Tesla global electric car sales totaled 11,603 units during the third quarter of 2015, including six Tesla Model X units. adding up to 80,000 to 90,000 new Model S and Model X vehicles in 2016. A total of 17,478 units were delivered globally during the fourth quarter of 2015, including 206 Model X vehicles. Model S sales in the United States totaled 16,689 units in 2014 and 25,202 in 2015.
Used vehicles