Tesla’s 16-year anniversary: A tale of trials, tribulations, and grit that continues to this day

(Photo: Tesla)

Sixteen years ago, engineer-entrepreneurs Martin Eberhard and Marc Tarpenning incorporated a company that was, for the most part, a legitimate long shot. Named Tesla Motors, the company occupied an office that had three desks and two small rooms in a decrepit building situated at 845 Oak Grove Avenue in Menlo Park, CA. The duo had a crazy business idea: they wanted to make electric cars, and they wanted to turn it into a business. At the time, the idea was practically insane, as EVs were not even part of any legitimate conversations in the auto market. Tarpenning and Eberhard had a concept for a Lotus-based electric sports car, but finding an investor who could pony up the $7 million required to build a prototype was insanely challenging. 

Tesla’s Roots

During this time, Elon Musk was still busy looking into the idea of sending mice on a journey into space. Fortunately for Eberhard and Tarpenning, they soon got word that Musk, a multimillionaire who started a private rocket company, was looking to invest in the electric vehicle sphere. The duo flew down to Los Angeles and met with the SpaceX founder on a Friday, and over the course of the following weekend, Musk peppered Tarpenning with a barrage of questions about Tesla Motors’ business model. By the following Monday, Tarpenning and Eberhard were back in LA for another meeting with Musk. At the end of the meeting, Musk simply informed the men, “Okay, I’m in.”

Musk was precisely what Tesla Motors needed. He had the engineering background to understand what the company was trying to build, and his funds from his Silicon Valley fortune were vast. Musk invested $6.5 million into Tesla Motors, making him the largest shareholder and the Chairman of the company. Not long after this, Musk contacted JB Straubel, particularly as Eberhard and Tarpenning were meeting challenges in their vehicle’s batteries. Musk and Straubel had previously formed a kinship after finding common ground in EVs, particularly with the latter’s interest in using lithium-ion batteries to power a car (Musk had also agreed to fund Straubel’s lithium-ion battery ideas). During his meeting with Eberhard and Tarpenning, Straubel told them that he was building the battery they were looking for, also using funding from Musk. “We agreed to join forces and formed this ragtag group,” Straubel said, recalling Tesla Motors’ earliest days. 

A lot has happened over the next 16 years. Tesla Inc., as the company is now called, has a market cap of around $40 billion, despite being one of the most shorted companies in the auto industry. The company has also expanded its operations to energy storage systems, a field that Straubel is still incredibly involved with. Elon Musk remains the largest shareholder and stands as the company’s CEO, though he has relinquished his Chairman role to board member Robyn Denholm following a run-in with the Securities and Exchange Commission. Today, Tesla is involved in what could only be described as a battle for the future of transportation, being the undisputed trailblazer in the electric vehicle market. So vast is the potential of the company that legendary investor Ron Baron has predicted that Tesla could eventually be a trillion-dollar company. 

A promotional image of the original Tesla Roadster. (Credit: Tesla)

From the Tesla Roadster to the Model 3

To say that it took a lot of effort for Tesla to get to this point is an understatement, particularly as every vehicle that the company has released was met with pushback and an immense amount of skepticism. The original Tesla Roadster, the car that Eberhard, Tarpenning, and Straubel were creating since the earliest days of the company, was released in 2008, right in the middle of the US financial crisis. Objectively speaking, a two-seater, all-electric sports car was not a practical purchase then. The original Tesla Roadster had its own fair share of production challenges as well, to the point where auto publication The Truth About Cars actually decided to do a Tesla Death Watch series. Though late, the Roadster became successful nonetheless, forcing the Tesla Death Watch to end and becoming prolific enough to usher in the WhiteStar project, which would eventually become the Model S.

Bringing the Model S to market was just as hard, if not more difficult than the Roadster’s already-painful production ramp. In 2007, Musk showed noted auto designer Henrik Fisker Tesla’s idea for the WhiteStar sedan, a vehicle that must haul a family and cost about half the Roadster’s price. Fisker had a reputation for creating stunning automobiles for Aston Martin, BMW, and Mercedes-Benz, but as noted by Ron Lloyd, the former vice president of Tesla’s WhiteStar project, the designs he submitted for Tesla’s family sedan were strangely substandard. When Musk pushed back, Fisker would blame the physical constraints that Tesla placed on the car. And in 2008, Musk and the Tesla team looked in shock as Fisker started his own car company, Fisker Automotive, and unveiled the Karma, a hybrid vehicle that had all the makings of a well-designed green vehicle. It wasn’t until an established designer from Mazda, Franz von Holzhausen decided to take a leap of faith that project WhiteStar started progressing. Working with Musk on every detail of the car, the results of von Holzhausen’s work was the Tesla Model S, a car that would redefine not just electric vehicles, but cars as a whole. 

Tesla’s next vehicles were no less challenging. The Model X was dismissed as an impossible vehicle to make due to its Falcon Wing Doors. While significantly delayed, the all-electric SUV nevertheless entered production, though it took extreme measures, such as Musk sleeping in the Fremont factory, to get the vehicle’s manufacturing underway. Fortunately for Tesla, it appears that the Model X became a lesson for the company, as evidenced by the more straightforward design of the Model 3, and later on, the Model Y. After coming to terms with its own hubris and creating what Elon Musk aptly described as the Fabergé egg of cars in the Model X, Tesla appears to have matured. This could be seen in the similarity of the company’s two mass-market vehicles. 

Credit: Tesla

Into the Future

Led by arguably one of the most relentless innovators alive today, Tesla remains engaged in battle every step of the way. Yet, despite the emergence of competitors that are generously dubbed “Tesla Killers,” and despite the persistently negative narrative surrounding the company, the electric car maker continues to grow. Tesla has even expanded its operations in China, where Gigafactory 3 is being built at a record pace. Once that is completed, Tesla could tap into China’s lucrative electric vehicle market without any unnecessary restraints. Other vehicles in the company’s lineup, from the new Tesla Roadster to the Tesla Semi to the Tesla Truck, are expected to be just as disruptive as every other electric car that the company has released. 

Tesla’s electric cars are by no means the first EVs on the market. But they are the vehicles that forced the auto industry to recognize that there is a legitimate demand for compelling, well-designed electric cars. The presence of EVs such as the Porsche Taycan, which the German automaker expects will likely be practically as important as the 911, is proof that Tesla has and is succeeding in its mission to accelerate the world’s transition to renewable energy. A lot has happened in 16 years, but if Tesla’s character is any indication, it would seem that the company’s story is still just beginning. 

Watch a Tesla enthusiast’s tribute video to Tesla’s 16 years in the video below. 

Tesla’s 16-year anniversary: A tale of trials, tribulations, and grit that continues to this day
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