Tesla's Got the Keys: A History of Its Success (2023)

The U.S. car market is saturated with established automakers like Ford (F), Honda (HMC), and Chevrolet (GM). But one company stands out from the mix: electric car maker Tesla Motors (TSLA). Tesla and its CEO Elon Musk gained notoriety in 2012 when it released its flagship car, the Model S.

Tesla’s release positioned it as one of the few successful independent automakers and a pioneer in the electric car market. Notably, it also proved to be a hit with auto buyers. The Model S, a sleek luxury sedan that starts at $89,490, is ranked best in class in every category for electric sedans. When the Model S premiered in 2013, Tesla made headlines when trade press gave it laurels. The electric plug-in car received a near-perfect score of 99 out of 100 from Consumer Reports, which also named it as “the best car ever tested.”

By September 2014, the car hit all-time sales records in the U.S. with 2,500 sold in just one month, and in Q1 2015, sales reached a new high at 10,030 sold. It is now considered a staple within the electric car stratosphere. As of March 4, 2022, the company’s market capitalization was $909.6 billion.

Key Takeaways

  • Tesla Motors was founded as an electric carmaker by engineers Martin Eberhard and Marc Tarpenning in 2003.
  • Elon Musk, co-founder of Paypal, led the initial rounds of investing for Tesla before taking over as CEO.
  • In 2008, Tesla released its first electric car, the Roadster.
  • Tesla aims to create more affordable electric car options to attract a broader customer base.
  • Tesla expanded its geographic footprint, with production facilities in China and the U.S, as well as 438 stores and 100 service centers in various countries.

History of Tesla Motors

Contrary to popular belief, Tesla was not an overnight success. The company was founded in 2003 by two Silicon Valley engineers Martin Eberhard and Marc Tarpenning, who wanted to prove that "electric vehicles can be better, quicker and more fun to drive than gasoline cars.”

The seeds of the company go back to 1990 when Tarpenning met Eberhard, then an engineer at Wyse Technology, and they became good friends. The two had much in commonincluding a passion for starting companies, and they soon launched companies including NuvoMedia, which released the Rocket eBook in 1998.

(Video) Tesla s Got the Keys A History of Its Success

A passion for autos started soon after Eberhard went through a divorce and decided to buy a sports car. He considered entering the electric car industry after investing in a boutique electric automaker named AC Propulsion.

In 2001, Eberhard and Tarpenning met Elon Musk after hearing him speak at a Mars Society talk at Stanford University. At that time, Musk already had a portfolio of successful start-ups. In 1998, Musk, Peter Thiel, and Max Levchin co-founded the online payment system PayPal, which they then sold to eBay in 2002. Impressively, Musk made $165 million in stocks from the sale. Soon after, Musk launched Space X, a company that designs, manufactures, and launches advanced rockets and spacecraft.

Tesla was officially incorporated in 2003 with the goal of inventing an electric car that was powerful, beautiful, andwith zero emissions.Other co-founders were JB Straubel—the company's chief technology officer (CTO) until 2019—and Ian Wright, who left Tesla in 2004. Wright later founded the electric vehicle powertrain company Wrightspeed.

In 2004, the company’s co-founders went through initial rounds of investing with venture capital firms. Musk led the initial round of funding and soon joined as the head of the board of directors. The company’s investors included friends, family, and a litany of VC firms, including Valor Equity Partners.

Tesla CEO: Elon Musk

ElonMusk has become the face of Tesla and is often mistaken as the company’s founder. Musk is a South African-born, Canadian-American who was trained as an engineer. He earned a dual bachelor of science degree in Physics and Economics from the University of Pennsylvania.

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That said, he is an entrepreneur and inventor at heart. In 1995, Musk enrolled in Stanford's Applied Physics Ph.D. program but dropped out to focus on his business efforts in the renewable energy and outer space arena.

Soon after, he launched several small successful companies, includingthe online publishing company Zip2. From that sale, Musk started X.com, an online bank that was acquired by Confinity.

Tesla Motors: The Early Years

From 2004 to 2008, Tesla grew substantially and developed its first automobile, The Roadster. The company opened its manufacturing plant in Fremont, CA, a 5.3 million square-feet factory that was previously owned by Toyota and General Motors. The factory is known as Nummi, which includes two paint facilities and 1.5 miles of assembly lines.

In 2008, Musk became the company’s CEOand product architect, positions he still holds as of March 2022. That same year, Tesla released its first automobile, the Roadster sports car. "It is not just a car, but one of the strongest automotive statements on the road,” Car and Driver wrote.

Tesla Motors Today

Tesla, as part of its secret to success, continues to focus on creating electric cars and making electric vehicle (EV) powertrain systems and components. As of 2021, the company has a network of 438 stores and galleries, 100 service centers, and more than 30,000 Superchargers (charging portals) in over 3,100 locations.

Tesla owns the patent to the electric car charging station, the Supercharger.

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One of the company’s trademarks is to focus on one product at a time. And while Tesla continues making the Model S, it is rolling out new models to expand its customer base. Other models include the less expensive Model 3 sedan, the SUV-style Model X, and the crossover Model Y.

Tesla Motors Strategy

To move with the changing times, Tesla focuses on launching new offerings that target a wider range of consumers. To stay competitive in the niche market, Tesla Motors has expanded its operations globally with locations in the U.S. and China.

To keep costs down on lithium-ion battery packs, Tesla and key strategic partners, including Panasonic, built a Gigafactory in Nevada that produces the Model 3, battery packs, and energy storage products.

Tesla Motors: Looking Forward

The electric car market is growing, with luxury automakers like Mercedes Benz and BMW jumping into the space. Analysts forecast that the total global sales of electric vehicles will be approximately 29.5% of all new car sales by 2030.

That said, Tesla’s long-term success is anyone’s guess. In December 2014, Morgan Stanley’s auto analyst Adam Jonas predicted that the company would fall short by 40% of its goal to produce 500,000 cars by 2020. However, Tesla produced more than 510,000 cars by the end of 2020, exceeding its goal by 2%.

As with anything, there are no guarantees. The reality is that Tesla Motors has morphed from a start-up to an established industry player. What doesn’t change is its extraordinary story and its place as a pioneer in a frontier of electronic cars.

Who Are the Founders of Tesla Motors?

Perhaps the most notable figure associated with Tesla Motors is Elon Musk. However, the company was founded in 2003 by American engineers Marc Tarpenning and Martin Eberhard.

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When Was Tesla Motors Founded?

Tesla Motors was established in 2003 as an electric car maker. Its first product, the Roadster, debuted in 2008.

When Did Tesla Start Producing Cars?

Tesla launched in 2003 and released its first car in 2008. Between that time, Tesla focused its operations on research and development and the production of its first product.

When Did Tesla Start Selling Cars?

Tesla began selling cars in 2008. Its first offering was the Roadster, now donned the quickest car in the world.

How Successful Is Tesla Motors?

Tesla Motors has become the leader in the electric car market, with a market capitalization of over $900 billion.

(Video) First Tesla Model S delivery in 2012 by Elon Musk - how the success story started. Tesla history

FAQs

What are Tesla's key success factors? ›

Strong scientific research and innovation ability is the most important factor for Tesla's success. Tesla announced its R & D investment in 2020. In 2020, Tesla invested $1.491 billion in R & D, a year-on-year increase of 11%[7]. At present, Tesla is still developing self driving electric vehicles.

What was Tesla's most successful year? ›

2021 was the brand's most successful full financial year to date. The company's market capitalization continued to set records in 2022 after climbing over one trillion U.S. dollars in 2021. On March 31, 2022, Tesla's valuation stood at over 1.1 trillion U.S. dollars.

How does Tesla measure success? ›

In addition, Tesla also establishes Key Performance Indicators (KPIs) to monitor its production and inventory and to generally assess the success of achieving the goals within the predetermined duration (Karamitsios, 2013).

How did Tesla finance its founding? ›

Funding for the company was obtained from a variety of sources, most notably PayPal cofounder Elon Musk, who contributed more than $30 million to the new venture and served as chairman of the company, beginning in 2004. In 2008 Tesla Motors released its first car, the completely electric Roadster.

What are the key success factors in the electric car industry? ›

The two-highest ranked key factors, battery price and range, as well as the factors of charging time and battery technology, show that the success of electro mobility is decisively dependent on advances in battery technology.

What strategy did Tesla use? ›

The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model.

What makes Tesla unique? ›

Tesla took a unique approach to establish itself in the market. Instead of trying to build a relatively affordable car that it could mass-produce and market, it took the opposite approach, focusing instead on creating a compelling car that would create a demand for electric vehicles.

What is the cheapest Tesla? ›

The Tesla Model 3 is a mid-size electric sedan that's currently the cheapest of all Tesla models. Even after the 2022 Tesla Model 3 price increase, it's still the most affordable model from the company. The base model now sells at $46,990 with only rear-wheel drive capability.

What is special about Tesla cars? ›

An autopilot or autonomous technology is being designed to assist the human driver in case of emergency, and that Tesla cars have proven time and again. Tesla has achieved Level 2 autonomy in all its vehicles and will soon replace radar based systems with camera technology.

How Elon Musk motivate his employees? ›

Using words to motivate the employees, Elon Musk deeply praised Tesla employees for working with their full creativity and inventiveness in the email. He disclosed how honored he is to work with them as a team and stated that he was proud of their accomplishments.

Why is Tesla so popular? ›

Brand Loyalty Like No Other. Last year Tesla became the carmaker with the most satisfied customers for the third year in a row. Consumer Reports said at the time Tesla had received 98 out of 100 points regarding the driving experience, comfort, value, and styling, as well as things such as the audio and climate systems ...

How Tesla is changing the world? ›

In 2020, Tesla customers helped accelerate the world's transition to sustainable energy by avoiding 5.0 million metric tons of CO2e emissions. In 2020, Tesla customers helped accelerate the world's transition to sustainable energy by avoiding 5.0 million metric tons of CO2e emissions.

Does the government pay for your Tesla? ›

The federal government offers a tax credit of up to $7,500 if you buy a fully-electric, plug-in hybrid vehicle. Since Tesla's vehicles are fully electric, customers receive the full $7,500. But that tax credit starts to expire after a company sells 200,000 qualifying electrified cars in the US.

Did Tesla pay back its loan? ›

However, Tesla paid that loan off nine years ahead of schedule. In fact, the electric automaker has made a habit of paying loans off early. Unfortunately, though, the US government penalized Tesla for that early payoff. Musk recently replied to a tweet explaining the situation.

How long does a Tesla battery last? ›

Tesla car batteries are said to be designed to last 300,000-500,000 miles (as purported by Tesla CEO Elon Musk), or about 21-35 years, based on the average amount of miles driven by Americans in one year, which is typically around 14,263.

How can I promote my electric car? ›

Provide convenience incentives and other perks
  1. Build public EV charging infrastructure and encourage other stakeholders to invest. ...
  2. Offer free public parking and priority parking, and consider offering free charging initially. ...
  3. Enable and incentivise zero emission freight.

What are the variables if any which would hinder an e car achieving the range it is claiming? ›

While some of these factors can be mitigated through driving behavior, most are just the realities of real-world driving.
...
Factors That Affect Electric Vehicle Range:
  • Speed. Speed kills. ...
  • Wind. ...
  • Payload. ...
  • Tire Traction. ...
  • Cold Weather. ...
  • HVAC. ...
  • Battery Degradation.
6 Apr 2020

What are Tesla's 3 main strategies at the beginning? ›

Tesla's Growth Strategy
  • Build a sports car.
  • Use that money to build an affordable car.
  • Use that money to build an even more affordable car.
  • Provide zero emission electric power generation options while doing all of the above.
1 Apr 2022

What are Tesla's competitive advantages? ›

Conclusion. Tesla is a leading player in the EV sector. The company's competitive advantages emanate from its focus on environmental sustainability, its incorporation of technological innovations, product differentiation, and cost leadership among other aspects.

How is Tesla different from other electric cars? ›

Main Differences Between Tesla and Other Electric Cars

Tesla has a low production capacity due to its business model while other electric cars can be produced at a higher scale. Tesla has more demand and less supply while for other electric cars supply is not a constraint but demand can be.

Who is Tesla's biggest competitor? ›

Who Are Tesla's Top 3 Competitors? Ford, GM, NIO, and Volkswagen are four of Tesla's main competitors. China's BYD, sold over 590,000 vehicles in 2021 and is a contender. Another Chinese company, SGMW, sold over 450,000 EVs in 2021.

Why is Tesla better than gas cars? ›

The Tesla Model S currently has the longest range out of any EV, with a very impressive 405 mile rating from the EPA. This is not much lower than some of the most fuel-efficient gas cars. EVs with such long ranges are almost exclusively offered by Tesla.

Are Teslas expensive to fix? ›

Yes, Tesla vehicles are quite expensive to fix. According to RepairPal, the average yearly Tesla maintenance cost is about $832 per year. The average among all car brands was a much lower $652 per year. Teslas also have the third-worst reliability score among all automakers.

Is Tesla charging free? ›

Once upon a time, all Tesla cars got free lifetime charging

When the Model 3 was introduced customers received non-transferrable free Supercharging, however as the company grew and worked towards maintaining profitable quarters, the company cut the perk in May 2020.

What does it cost to replace a Tesla battery? ›

Tesla battery replacement cost varies depending on the labor and parts needed. Typically, the most basic battery replacement in tesla costs between $13,000 and $14,000. For the Model S premium sedan, replacing a Tesla battery costs around $13,000-$20,000.

What happens when Tesla runs out of battery? ›

Answer provided by. If you're driving an electric car and it runs out of power, the short and simple answer is this: the car will stop—and you'll need to call roadside assistance to get towed to the nearest charging station.

How long can a Tesla sit without driving? ›

Because this option only keeps activated for 12 hours after the car is parked, the on-screen notice for this option reads as follows: Cabin Overheat Protection maintains the cabin temperature under 105 F while parked for up to 12 hours after you leave. No A/C mode consumes less energy but temperatures may exceed 105 F.

Why do people buy Teslas? ›

Tesla's brand recognition and perceived elite status increase demand for these vehicles. The key factors that drive demand for all EVs involve the cost of gasoline, the available features (all-wheel drive, sedan versus larger vehicles), availability of battery charging stations, and the appeal of the “green” movement.

What are Tesla's competitive advantages? ›

Conclusion. Tesla is a leading player in the EV sector. The company's competitive advantages emanate from its focus on environmental sustainability, its incorporation of technological innovations, product differentiation, and cost leadership among other aspects.

How Tesla can increase their profitability? ›

To maintain profitability, Tesla must continuously increase efficiency and reduce costs. As part of this effort, Tesla is expanding its manufacturing capacity. The company is near completion of Gigafactory 3 in Shanghai (which will produce cars that are 50% cheaper per unit capacity than existing production lines).

How did Tesla grow so fast? ›

Because Tesla controls so many of its supplies and manufacturing, Tesla can control its cars very quickly with changes without having to work with a 3rd party. It makes Tesla very nimble and fast, whereas other auto makers are very slow to change and make improvements.

What is special about Tesla cars? ›

An autopilot or autonomous technology is being designed to assist the human driver in case of emergency, and that Tesla cars have proven time and again. Tesla has achieved Level 2 autonomy in all its vehicles and will soon replace radar based systems with camera technology.

Who is Tesla's biggest competitor? ›

Who Are Tesla's Top 3 Competitors? Ford, GM, NIO, and Volkswagen are four of Tesla's main competitors. China's BYD, sold over 590,000 vehicles in 2021 and is a contender. Another Chinese company, SGMW, sold over 450,000 EVs in 2021.

How Tesla is changing the world? ›

In 2020, Tesla customers helped accelerate the world's transition to sustainable energy by avoiding 5.0 million metric tons of CO2e emissions. In 2020, Tesla customers helped accelerate the world's transition to sustainable energy by avoiding 5.0 million metric tons of CO2e emissions.

What makes Tesla different from other electric cars? ›

Tesla is leading the electric vehicle race because it has more high-powered battery tech — and it takes more risks. For more than a decade, Tesla has been designing battery-powered vehicles from the ground up and using software to make the batteries more efficient.

What is the most profitable car company? ›

It's no surprise to see Toyota at the top of the chart for having earned the most profits, even during a year like 2020. Toyota is one of the top car brands, as their vehicles are known for being reliable and reasonably priced as well as stylishly designed.

How much is Tesla's debt? ›

Tesla long term debt for the quarter ending June 30, 2022 was $2.898B, a 63.18% decline year-over-year. Tesla long term debt for 2021 was $5.245B, a 45.4% decline from 2020. Tesla long term debt for 2020 was $9.607B, a 17.42% decline from 2019. Tesla long term debt for 2019 was $11.634B, a 23.71% increase from 2018.

How did Tesla avoid the chip shortage? ›

Tesla is a new company, which gives it flexibility on chips

In this way, Tesla CEO Elon Musk has been able to keep production lines running, by relying on in-house software engineering expertise, which has made it more efficient than many rival automakers at accommodating a global shortage of semiconductors.

Why is Elon Musk so rich? ›

Musk is a South Africa-born billionaire entrepreneur who serves as CEO of Tesla, a popular electric vehicle manufacturer, and SpaceX. Musk made an early fortune founding PayPal in 1999. EBay bought the company in 2002 for $1.5 billion, and Musk made $180 million from the deal, Time Magazine reported.

Is Tesla the most successful car company? ›

Most valuable automotive brands worldwide by brand value 2022. The Tesla marque was ranked as the world's most valuable car brand in 2022, with a brand value of roughly 75.9 billion U.S. dollars. Toyota, 2020's leader, is now the runner-up, followed by Mercedes-Benz.

What happens when Tesla runs out of battery? ›

Answer provided by. If you're driving an electric car and it runs out of power, the short and simple answer is this: the car will stop—and you'll need to call roadside assistance to get towed to the nearest charging station.

How long can a Tesla sit without driving? ›

Because this option only keeps activated for 12 hours after the car is parked, the on-screen notice for this option reads as follows: Cabin Overheat Protection maintains the cabin temperature under 105 F while parked for up to 12 hours after you leave. No A/C mode consumes less energy but temperatures may exceed 105 F.

How long does a Tesla battery last? ›

Tesla car batteries are said to be designed to last 300,000-500,000 miles (as purported by Tesla CEO Elon Musk), or about 21-35 years, based on the average amount of miles driven by Americans in one year, which is typically around 14,263.

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