Tesla

Original roadster and private funding

Tesla Motors was founded by Martin Eberhard and Marc Tarpenning on July 1, 2003.[1] In the
early days of the company, the two financed its operations before calling for outside funding.
[1]
 Following an early Series A round of funding, the company's board was joined by investors Elon
Musk, J. B. Straubel and Ian Wright.[1] A September 2009 lawsuit settling agreement between
Eberhard and Tesla Motors allows all five to call themselves founders. [2] The founders were
influenced to start the company after GM recalled and destroyed its EV1 electric cars in 2003.[9]

The insignia of Tesla as seen on a Tesla Roadster (2008) Sport

Eberhard and Marc Tarpenning conceived and founded the company, also funding the company
until the Series A round.[10] Musk led the Series A in February 2004, joining the board of directors
as its chairman as well as in operational roles. Musk was then the controlling investor in Tesla,
providing the large majority of the US$7.5 million round with personal funds. Co-founder Martin
Eberhard was the original CEO of Tesla until he was asked to resign in August 2007 by the board
of directors.[10][11] Eberhard then took the title of "President of Technology" before ultimately
leaving the company in January 2008 along with co-founder Marc Tarpenning, who served as
the CFO and subsequently the Vice-President of Electrical Engineering of the company until
2008. [10][11] Eberhard later filed suit against the company, alleging that current CEO Elon Musk
sought to "rewrite history".[2]

Tesla began with a sports car aimed at early adopters followed by mainstream and mass market
vehicles,[12][13] all serving "as a catalyst to accelerate the day of electric vehicles". [14]

Tesla signed a Roadster production contract on July 11, 2005, with Group Lotus to produce
"gliders" (complete cars but without powertrain).[15] The Roadster used an AC motor descended
directly from Nikola Tesla's original 1882 design. [16]

The Tesla Roadster (2008) was the first production automobile to use lithium-ion battery cells and
the first production EV with a range greater than 200 mi (320 km) per charge.[17] Between 2008
and March 2012, Tesla sold more than 2,250 Roadsters in 31 countries. [18][19][20] Tesla stopped
taking orders for the Roadster in the U.S. market in August 2011. [21]
In December 2012, Tesla employed almost 3,000 full-time employees. [22][23] As of late 2016, Tesla
employed more than 30,000 (25,000 in the US) after acquiring Grohmann and SolarCity.[24]

Musk also led Tesla's Series B US$13 million investment round and co-led the third, US$40
million round in May 2006. Tesla's third round included investment from prominent entrepreneurs
including Google co-founders Sergey Brin and Larry Page.[25] The fourth round in May 2007
added another US$45 million.

In late 2007, Tesla brought on Michael Marks,[26] and later Ze'ev Drori, to replace Eberhard as
CEO.[27] Drori temporarily returned the company to profitability, reducing the company's workforce
by about 10%.[28] In October 2008, Musk became CEO and laid off an additional 25% of Tesla's
workforce.[27] In December, a fifth round added another US$40 million, avoiding bankruptcy.[29][30]

By January 2009, Tesla had raised US$187 million and delivered 147 cars. Musk himself had
invested US$70 million.[28][31] In May 2009, Daimler AG acquired an equity stake of less than 10%
of Tesla for a reported US$50 million,[32][33] again saving Tesla.[34] Toyota provided a similar amount
in 2010.[33]

The Tesla obelisk is used to identify the Supercharger network sites in California.

In June 2009, Tesla was approved to receive US$465 million in low-interest loans from the
2007 US$8 billion Advanced Technology Vehicles Manufacturing Loan Program by the United
States Department of Energy.[35] The funding came in 2010 and supported engineering and
production of the Model S, as well as the development of commercial powertrain technology.[35]

Late 2018, Elon Musk made a bold promise to have "Tesla Chargers" located all across Europe
by the end of 2019.

Production and sales[edit]

Global sales passed 250,000 units in September 2017, [98][99] and Tesla produced its 300,000th
vehicle in February 2018.[100] Tesla's global sales achieved the 500,000 unit milestone in
December 2018.[101]
 Total Model S Model X Model 3 Total[b
Quarter sales In transit[c] Source
production sales sales sales ]
Q1 2015 11,160 10,045 10,045 [102]

Q2 2015 12,807 11,532 11,532 [103]

Q3 2015 13,091 11,597 6 11,603 [104]

Q4 2015 14,037 17,272 206 17,478 [105]

Q1 2016 15,510 12,420 2,400 14,820 2,615 [68]

Q2 2016 18,345 9,764 4,638 14,402 5,150 [106][107]

Q3 2016 25,185 16,047 8,774 24,821 5,065 [108]

Q4
24,882 12,700 9,500 22,254 6,450 [109][110]
2016[d]

Q1 2017 25,418 ~13,450 ~11,550 25,051 ~4,650 [111]

Q2 2017 25,708 ~12,000 ~10,000 22,026 ~3,500 [112][113]

Q3 2017 25,336 14,065 11,865 222 26,137 4,820 [114][98]

Q4 2017 24,565 ~15,200 ~13,120 1,542 29,967 3,380 [115][116]

Q1 2018 34,494 11,730 10,070 8,182 29,997 6,100 [117]

Q2 2018 53,339 10,930 11,370 18,440 40,740 15,058 [118][119]

Q3 2018 80,142 14,470 13,190 56,065 83,725 11,824 [120][121]

Q4 2018 86,555 13,500 14,050 63,150 90,700 2,907 [122]

Strategy[edit]
Tesla aims to change the automotive industry by creating many innovative pieces that fit together;
this strategy was called "complex coordination" by Tesla investor Peter Thiel.[125] Its marketing,
production, sales and technology strategies all are notably different from its competitors.

Robotic manufacturing of the Model S at the Tesla Factory in Fremont, California

Tesla's automotive strategy is to emulate typical technological-product life cycles and initially

target affluent buyers. It then moved into larger markets at lower price points. [12][126] The battery
and electric drivetrain technology for each model would be developed and paid for through the
sales of earlier models.[12][127] The Roadster was low-volume and priced at US$109,000. Model S
and Model X targeted the broader luxury market. Model 3 is aimed at a higher-volume segment. [13]
[128]
 This business strategy is common in the technology industry.[129] According to a Musk blog
post, "New technology in any field takes a few versions to optimize before reaching the mass
market, and in this case it is competing with 150 years and trillions of dollars spent on gasoline
cars."[130]

Tesla's production strategy includes a high degree of vertical integration (80% in 2016[131]), which
includes component production and proprietary charging infrastructure. The company operates
enormous factories to capture economies of scale. Tesla builds electric powertrain components
for vehicles from other automakers, including the Smart ED2 ForTwo electric drive(the lowest-
priced car from Daimler AG), the Toyota RAV4 EV, and Freightliner's Custom Chassis Electric
Van. Vertical integration is rare in the automotive industry, where companies typically outsource
80% of components to suppliers,[132] and focus on engine manufacturing and final assembly. [133][134]

The Tesla Patent Wall at its headquarters was removed after the company announced its patents are part
of the open source movement.[135]

Tesla's sales strategy is to sell its vehicles online and in company-owned showrooms rather than
through a conventional dealer network.[136][137]

Tesla's technology strategy focuses on pure-electric propulsion technology, and transferring other
approaches from the technology industry to transportation, such as online software updates.
[138]
 Tesla allows its technology patents to be used by anyone in good faith. [139] Licensing
agreements include provisions whereby the recipient agrees not to file patent suits against Tesla,
or to copy its designs directly.[140] Tesla retained control of its other intellectual property, such as
trademarks and trade secrets to prevent direct copying of its technology.[141]

Tesla Human Resources VP Arnnon Geshuri committed to bringing manufacturing jobs "back to

California".[142][143] In 2015, Geshuri led a hiring surge about which he said: "In the last 14 months
we've had 1.5 million applications from around the world. People want to work here." [144] Geshuri
emphasizes hiring veterans, saying "Veterans are a great source of talent for Tesla, and we're
going after it."[143][145][146]

Sales[edit]
Tesla's global sales since 2012 totaled over 532,000 units at the end of 2018, of which, over
245,000 were delivered in 2018, up almost 138% from 2017. [147] Year over year U.S. sales from
2017 to 2018, Tesla vehicle sales increased by 280% from 48,000 to 182,400. [148] As of
October 2018, Tesla's sales represented about 20% of all the all-electric cars on the world's
roads, according to Navigant Research.[101] In July 2017, Tesla said their vehicles had traveled 5
billion miles (8 billion km).[149]
Cumulative global sales of Tesla's electric vehicles by model up to December 2018

Model/launch year Units delivered

Roadster (2008)   2,450

Model S (2012)   263,504

Model X (2015)   120,739

Model 3 (2017)   147,610

In 2016 BYD Auto was the world's top selling plug-in car manufacturer with 101,183 units sold,
followed by Tesla with 76,243. [150][151] However, Tesla revenues ranked ahead in terms of revenue
with US$6.35 billion, while BYD notched US$3.88 billion.[152] Also in 2016, Tesla sold US$$1
billion worth of cars in China, the world's largest market for electric vehicles, and in October of the
following year it reached an agreement with the Chinese government to build a factory
in Shanghai.[153]

After ranking third by brand in 2017, behind BYD and BAIC,[154][155] Tesla ranked as the world's
best selling plug-in passenger car manufacturer in 2018, with 245,240 units delivered, capturing a
market share by brand of 12% of all plug-in cars sold globally in 2018, [122][156] followed by BYD Auto
with 227,152 plug-in passenger delivered, representing a global market share of 11% by brand.
[156][157]

In August 2015, Tesla launched a revamp of its stores to include interactive displays focused on
safety, autopilot, charging network and motors.[158] As of October 2016, Tesla operated about 260
galleries or retail locations in the United States.[159] In June 2016, Tesla opened its first store-
within-a-store: a small outpost within the Nordstrom's department store at The Grove shopping
mall in Los Angeles.[160] In 2017, Tesla opened retail locations in Dubai and South Korea.[161]

Foreseeing Germany as its second market after the U.S. (and the largest in Europe), in 2016
Tesla stated the Dutch (Dienst Wegverkeer) RDW-issued Whole Vehicle Type Approval (WVTA)
should be accepted as a legal compliance document, with no need to seek specific national type
of approvals in EU member states.[162] In 2017 Tesla had a US$52 million marketing budget and
used a referral program and word of mouth to attract buyers.[163][164]

US dealership disputes[edit]
Main article: Tesla US dealership disputes
Tesla gallery in Austin, Texas

Tesla operates stores and galleries[165][166]—usually located in shopping malls—in many U.S.
states. However, customers buy vehicles only from the Tesla website. [167][168][169][170] The stores
serve as showrooms that allow people to learn about the company and its vehicles. Some
galleries are located in states with restrictive dealer protection laws that prohibit discussing price,
financing, and test drives, as well as other restrictions.

Tesla's strategy of direct customer sales and owning stores and service centers is different from
the standard dealership model in the global vehicle marketplace. Tesla is the only automaker that
sells cars directly to consumers; all others use independently owned dealerships, [171][172] although
many provide online configuration and financing. [173][174][175] 48 states have laws that limit or ban
manufacturers from selling vehicles directly to consumers, [176][177][178] and although Tesla has no
independent dealerships, dealership associations in multiple states have filed lawsuits over
Tesla's sales practices.

Countries other than U.S. do not protect dealers. The Federal Trade Commission recommends
allowing direct manufacturer sales,[179][180] which analysts believe would save consumers 8% on
average.[181][182]

Used vehicles[edit]
Under a buyback program called the Resale Value Guarantee available in 37 U.S. states, a Tesla
Model S sold before July 1, 2016 included the right to return it after three years with
reimbursement of 43% to 50% of its initial price. This reimbursement matched the trade-in values
of competitive German luxury cars of that age. In addition to maintaining the resale value, Tesla
hoped to secure a supply of used cars to refurbish and re-sell with warranty. According
to Automotive News, the profit margin on used car sales in the U.S. is about triple that on new
cars, and Tesla's direct sales would allow it capture resale profits. [183] Tesla ended the program in
2016, although they retained the Residual Value Guarantee on leased vehicles. [184][185]

In May 2015, Tesla started selling refurbished Model S cars in the U.S.[186] and within a month
sold 1,600 cars.[187] As of July 2017, over 80 used Model S and Model X cars were for sale, with
either a four-year, 50,000-mile warranty [188] or a two-year, 100,000-mile warranty for vehicles
above 50,000 miles.[189][190] As of September 2015, similar programs existed in Canada, [191] Austria,
[192]
 Belgium,[193] Denmark,[194] France,[195] Germany,[196] Britain,[197] Netherlands,[198] Norway,
[199]
Sweden[200] and Switzerland.[201]

Technology[edit]
As a vertically-integrated manufacturer, Tesla has had to master multiple technology domains,
including batteries, electric motors, sensors and artificial intelligence.

Batteries[edit]
Tesla Supercharger in West Hartford, Connecticut

Unlike other automakers, Tesla does not use individual large battery cells, but thousands of
small, cylindrical, lithium-ion commodity cells like those used in consumer electronics. It uses a
version of these cells that is designed to be cheaper to manufacture and lighter than standard
cells by removing some safety features. According to Tesla, these features are redundant
because of the advanced thermal management system and an intumescent chemical in the
battery to prevent fires.[202] Panasonic is the sole supplier of the cells for Model S, Model X, and
Model 3 and cooperates with Tesla in the Gigafactory 1's '21–70' cells.[203]

In February 2016, Tesla battery costs were estimated at US$200 per kWh.[133] Tesla indicated
later in 2016 that their batteries cost less than $190/kWh. [204] Still later that year Argonne
Labs estimated $163/kWh at a production rate of 500,000 packs per year. [205][206]

The batteries are placed under the vehicle floor. This saves interior and trunk space but
increases risk of battery damage by debris or impact. The Model S has 0.25 in
(6.4 mm) aluminum-alloy armor plate.[207] CTO Straubel expected batteries to last 10–15 years,
[208]
 and discounts using electric cars to charge the grid (V2G) because the related battery wear
outweighs economic benefit. He also prefers recycling over re-use for grid once they reach the
end of their useful life for vehicles.[209][210] Since 2008, Tesla has worked with ToxCo/Kinsbursky
to recycle worn out RoHS batteries, which will be an integral part of GigaFactory. [211][212][213]

Motors