Tesla, Inc. (/ˈtɛslə/ TESS-lə or /ˈtɛzlə/ TEZ-lə[a]) is an American multinational automotive and clean energy company headquartered in Austin, Texas, which designs, manufactures and sells battery electric vehicles (BEVs), stationary battery energy storage devices from home to grid-scale, solar panels and solar shingles, and related products and services. The company is also developing artificial intelligence[6] and robotics[7] products.
Tesla was incorporated in July 2003 by Martin Eberhard and Marc Tarpenning as Tesla Motors. The company’s name is a tribute to inventor and electrical engineer Nikola Tesla. In February 2004, Elon Musk joined as the company’s largest shareholder; in 2008, he was named chief executive officer. In 2008, the company began production of its first car model, the Roadster sports car, followed by the Model S sedan in 2012, the Model X SUV in 2015, the Model 3 sedan in 2017, the Model Y crossover in 2020, the Tesla Semi truck in 2022 and the Cybertruck pickup truck in 2023. The Model 3 is the all-time bestselling plug-in electric car worldwide, and in June 2021 became the first electric car to sell 1 million units globally.[8] In 2023, the Model Y was the best-selling vehicle, of any kind, globally.[3]
Tesla is one of the world’s most valuable companies in terms of market capitalization. In October 2021, Tesla temporarily became a trillion dollar company, the seventh U.S. company to do so. In 2023, the company led the battery electric vehicle market, with 19.9% share. Also in 2023, the company was ranked 69th in the Forbes Global 2000.[9] As of March 2024, it is the world’s most valuable automaker. Tesla has been the subject of lawsuits, government scrutiny, and journalistic criticism, stemming from allegations of whistleblower retaliation, worker rights violations, product defects, fraud, and Musk’s many controversial statements.
History
Main article: History of Tesla, Inc.
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Founding (2003–2004)
The company was incorporated as Tesla Motors, Inc. on July 1, 2003, by Martin Eberhard and Marc Tarpenning.[10][11] They served as CEO and CFO, respectively.[12] Eberhard said that 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”.[13]
Ian Wright was Tesla’s third employee, joining a few months later.[10] In February 2004, the company raised US$7.5 million (equivalent to $12 million in 2023) in series A funding, including $6.5 million (equivalent to $10 million in 2023) from Elon Musk, who had received $100 million from the sale of his interest in PayPal two years earlier. Musk became the chairman of the board of directors and the largest shareholder of Tesla.[14][15][12] J. B. Straubel joined Tesla in May 2004 as chief technical officer.[16]
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.[17]
Roadster (2005–2009)
Main article: Tesla Roadster (first generation)
Elon Musk took an active role within the company, but was not deeply involved in day-to-day business operations.[18] The company’s strategy was to start with a premium sports car aimed at early adopters and then move into more mainstream vehicles, including sedans and affordable compacts.[19]
In February 2006, Musk led Tesla’s Series B venture capital funding round of $13 million, which added Valor Equity Partners to the funding team.[20][15] Musk co-led the third, $40 million round in May 2006 which saw investment from prominent entrepreneurs including Google co-founders Sergey Brin and Larry Page, and former eBay President Jeff Skoll.[21] A fourth round worth $45 million in May 2007 brought the total private financing investment to over $105 million.[21]
In August 2007, Eberhard was asked by the board, led by Elon Musk, to step down as CEO.[22] 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.[23] In August 2007, Michael Marks was brought in as interim CEO, and in December 2007, Ze’ev Drori became CEO and President.[24] Musk succeeded Drori as CEO in October 2008.[24] In June 2009, Eberhard filed a lawsuit against Musk for allegedly forcing him out.[25] The case was dismissed in August 2009.[26]
Tesla began production of the Roadster in 2008 inside the service bays of a former Chevrolet dealership in Menlo Park.[27][28] By January 2009, Tesla had raised $187 million and delivered 147 cars. Musk had contributed $70 million of his own money to the company.[29]
In June 2009, Tesla was approved to receive $465 million in interest-bearing loans from the United States Department of Energy. The funding, part of the $8 billion Advanced Technology Vehicles Manufacturing Loan Program, supported the engineering and production of the Model S sedan, as well as the development of commercial powertrain technology.[30] Tesla repaid the loan in May 2013, with $12 million in interest.[31][32]
IPO, Model S, and Model X (2010–2015)
In May 2010, Tesla purchased the NUMMI plant in Fremont, California from Toyota for $42 million.[33] On June 29, 2010, the company went public via an initial public offering (IPO) on the NASDAQ, the first American car company to do so since the Ford Motor Company had its IPO in 1956.[34] The company issued 13.3 million shares of common stock at a price of $17 per share, raising $226 million.[35]
In October 2010, Tesla opened the Tesla Factory to start production of the Model S.[36] In January 2012, Tesla ceased production of the Roadster, and in June 2012 the company launched its second car, the Model S luxury sedan.[37] The Model S won several automotive awards during 2012 and 2013, including the 2013 Motor Trend Car of the Year,[38] and became the first electric car to top the monthly sales ranking of a country, when it topped the Norwegian new car sales list in September 2013.[39] The Model S was also the bestselling plug-in electric car worldwide for the years 2015 and 2016.[40]
Tesla announced the Tesla Autopilot, a driver-assistance system, in 2014. In September that year, all Tesla cars started shipping with sensors and software to support the feature, with what would later be called “hardware version 1”.[41]
Tesla entered the energy storage market, unveiling its Tesla Powerwall (home) and Tesla Powerpack (business) battery packs in April 2015.[42] The company received orders valued at $800 million within a week of the unveiling.[43]
Tesla began shipping its third vehicle, the luxury SUV Tesla Model X, in September 2015, which had 25,000 pre-orders at the time.[44][45]
SolarCity and Model 3 (2016–2018)
Tesla entered the solar installation business in November 2016 with the purchase of SolarCity, in an all-stock $2.6 billion deal.[46] The business was merged with Tesla’s existing battery energy storage products division to form the Tesla Energy subsidiary.[47] The deal was controversial because at the time of the acquisition, SolarCity was facing liquidity issues of which Tesla’s shareholders were not informed.[48] In February 2017, Tesla Motors changed its name to Tesla, Inc. to better reflect the scope of its expanded business.[49]