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Tesla’s Journey to America’s Most Valuable Automaker

Tesla’s Journey to America’s Most Valuable Automaker

The year was 1990, an Engineer named Marc Tarpenning was returning home from Saudi Arabia where he was working for a company called Textron. At home in California, his longtime friend, Greg Renda was working for Wyse technology based in San Jose. Tarpenning went into the office on the invitation of his friend to see what he was working on. He saw the terminals that Renda was working on, he also saw Martin Eberhard, an engineer whose personality goes beyond the nuts and screws. He had entrepreneurial and companionship trait that Tarpening didn’t fail to notice.

In the next few days, the duo became bonded in entrepreneurial ideas that would defy the odds that have stifled some automotive inventions and stalled its progress. It was a beginning of a technical adventure that would cause a stir in the future of the automobile.

The first significant product of the duo was “tzero,” an all-electric two-seater, which could go from 0 to 60 in under 4 seconds. That was the beginning, in the days when the future of a company named Tesla Motors was hanging on hope, though it was promising.

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In 2003, Eberhard and Tarpenning had pushed the company to the limelight, making Tesla a name that the future of electric cars could count on – Tesla Motors was born. It was at this time that the two friends realized that they needed more hands, more funds, to foster the idea of NEV beyond a garage housing a few cars; although the original idea was to develop electric sports car, it appeared in no time, that the American people will be demanding more of what they have been shown. So they got a brilliant young man with some millions to throw in – the co-founder of Paypal, Elon Musk.

Eberhard was Tesla’s CEO then and Tarpenning, its CFO. With Musk on board, it’s a game on. In 2004, Musk would serve as the Chairman of the new venture, and in the four years that followed, the union gave birth to its first complete electric car, the Roadster. The Roadster was a monster, commanding speed and unprecedented durability. In company’s test, it achieved 245 miles (394 km) on a single charge; it was a record for electric car. Roadster was powered by lithium-ion cells often used on laptop batteries. And like the tzero, it could accelerate from 0 to 60 in less than 4 seconds and could reach a top speed of 125 miles (200 km) per hour.

Without internal combustion engine, the tailpipe emission of Roadster was zero, a feat environmentalists rated high and it put the car on the verge of wide approval. The car’s efficiency ratings were equivalent to a gasoline mileage of 135 miles per gallon (57 km per liter). These features put Roadster at the cost of $109,000, even though it had federal tax credit of $75,000. It was a luxury many couldn’t wait to have. And it defied the logic of challenge and impossibility to pioneer the path that keeps getting better with time.

In 2007, Eberhard resigned as the CEO of Tesla Motors and joined the advisory board. Tarpenning too, who was serving as the vice president of electrical engineering of the company, and was directly supervising the development of electronic and software systems for Roadster, resigned in 2008. Elon Musk became the CEO, and moved to change vehicles on Tesla’s menu from sports to family-friendly sedan. But fund posed a problem, and Musk appealed to the US Government who through the Advanced Technology Vehicle Manufacturing (ATVM) loan scheme, provided the company with a whopping $465 million loan. It was the lifeline the company needed to stay in business and expand its all-electric vehicles business.

Two years later, the result was stated boldly in the stock market. In 2010, there was $226 million Initial Public Offer (IPO) for Tesla. It was another big leap in the journey that humbly started seven years ago.

In 2012, Tesla turned its attention away from the Roadster to concentrate on its new Model S Sedan, the recent addition to the family. Model S came with three different battery options with some changes compared with the Roadster. It has underneath space, creating extra storage space in front because its center of gravity is low. But it shared the same speed performance with tzero and Roadster.

The Tesla autos was spreading quickly across the US and Europe that the company saw a need to build Superchargers, charging stations designed to charge Tesla vehicles free of charge for users. The Superchargers were later renamed Tesla Stations, where services like battery replacement were offered to customers.

In 2014, the autopilot initiative came into play, a semi-autonomous driving idea that was introduced with the Model S, and subsequently, other models. The next year, the Model X came into play with a battery range of 295 miles (475), it was designed with seven seats.

But Tesla cars were expensive and the cost dampens the wish of many to own one, the situation prompted the debut of Model 3 in 2017, a four-door sedan with a range of 220 miles, and the price at $35,000. Well, the Model 3 didn’t break the sales-lock soon, not until 2019 when the order numbers started counting high, changing the financial status of Tesla.

In 2018, a tweet from Elon Musk got him into trouble. He had made a series of tweets about taking Tesla private, claiming that he had secured funding. That didn’t go well with the US Securities and Exchange Commission (SEC), and Musk was charged with fraud. The Commission alleged that he was lying and misleading investors with his tweets. But Tesla’s board rejected a settlement proposed by SEC because Musk threatened to resign, and the situation set the company’s stock crashing, forcing Tesla and Musk to accept $20 million fine, in a less generous deal which includes Musk stepping down as chairman at least for three years, though he was allowed to stay as the CEO.

The 2019 opening of Tesla factory in Shanghai was a milestone in the company’s decade. The demand from the world’s most viable electric vehicle market is adding pillage to the posture of the company. Tesla said it has delivered 112,000 vehicles in the fourth quarter, which exceeds the consensus estimate among analysts.

It is 2020, and Tesla’s market cap has crept all the way up to $85.8 billion, a staggering amount delivered within a decade and a half, which surpassed the combined market cap of GM and Ford; both have existed for decades before the birth of Tesla.

From Elon Musk’s Spacex project to solar panel to Tesla’s Shanghai Factory in China, it has been a decade to be proud of for the company and its 49 year old CEO, who is now the 34th richest person in the world. And with many new projects unfolding eventually, the innovation behind Tesla is yet to be born.

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