General Motors seems on the cusp of the cutting edge when it unveiled the GM EV-1, a two-seat electric car that is acclaimed as a technological breakthrough.
But it’s now July 2006, three years since the automaker killed the car, much to the chagrin of its contented owners, who don’t believe the automaker’s official line that the EV-1’s 100-mile-range makes it an unattractive proposition.
But it was this week 17 years ago that the first new electric vehicle (or EV) since the GM EV-1 is unveiled by Tesla Motors, a four-year-old Silicon Valley startup. And its first model would prove true to form, being very fast, very expensive and a huge leap forward in EV technology.
The first modern EV
The Tesla Roadster’s 6,831 lithium batteries run 250 miles on a charge, and weigh 900 pounds, 200 pounds less than the EV-1’s 26 lead acid batteries. Better yet, the Tesla recharges in 3.5 hours on a 240-volt circuit. Best of all, it goes 150 miles for the price of a gallon of unleaded regular.
Well, back then anyway.
Based on the Lotus Elise sports car, it runs 0-to-60 mph in 4 seconds, incredibly fast for the time. Prices range from $85,000 to $100,000, or $127,441 to $149,931 when adjusted for inflation. But the company is unconcerned about its price.
“Cellphones, refrigerators, color TV’s, they didn’t start off by making a low-end product for masses,” said company chairman, Martin Eberhard, to the New York Times. “They were relatively expensive, for people who could afford it.”
Eberhard added they did that “not because they were stupid and they thought the real market was at the high end of the market.”
Few knew it then, but it the introduction marks what appears to be the beginning of the end of the internal combustion engine.
Financing keep Tesla afloat
Tesla Motors is established in July 2003 by two Silicon Valley engineers, Martin Eberhard and Marc Tarpenning, joined later by J.B. Straubel, Ian Wright, and Elon Musk. Eberhard was Tesla’s first CEO, with Tarpenning serving as CFO. The company is named for Nikola Tesla, a pioneer in electricity.
The company finds its financial footing thanks to PayPal co-founder Musk, who leads its Series A funding in 2004, while investing $6.5 million of his own money to the corporate kitty and becoming board chairman that same year.
With cash in the banks and its staff in place, in 2005, Tesla contracts British sports car maker Lotus Cars to provide the chassis and design for its first car, the Tesla Roadster. Musk initiates a Series B round of funding in 2006, a move that raises $13 million in all.
The introduction of the Roadster follows shortly thereafter, lending the company buzz, which helps the company’s Series C round of funding, one that sees Musk’s Silicon Valley connections helping the neophyte firm, as Google founders Sergey Brin and Larry Page invest along with a number of others, allowing the company to rake in $40 million. A fourth round the following year brings in $105 million.
Musk’s ambitions
Finding aside, the Tesla Roadster proves alluring. Then again, given its Lotus DNA, how could it not? The new auto executives certainly chose wisely, as news of the car’s introduction has many plopping down $100,000 each to be the first on their block in Beverly Hills, and elsewhere, with the first cars expected to reach them in 2007.
But it’s just the initial steep in the company’s plan, one elaborated in a treatise by Musk, entitled “The Secret Tesla Motors Master Plan (Just Between You and Me).” In it, he concedes that his initial goal is to build a high performance electric sports car.
But his ambitions are greater than that.
While many are now tired of Musk’s endless bloviating, it is novel at the time.
“Our long-term plan is to build a wide range of models, including affordably priced family cars,” he writes.
But he has a bigger mission in mind.
“The overarching purpose of Tesla Motors (and the reason I am funding the company) is to help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy, which I believe to be the primary, but not exclusive, sustainable solution,” he continued.
“Critical to making that happen is an electric car without compromises, which is why the Tesla Roadster is designed to beat a gasoline sports car like a Porsche or Ferrari in a head to head showdown. Then, over and above that fact, it has twice the energy efficiency of a Prius.”
A change at the top
Not long after, Martin Eberhard is asked to resign by the board of directors. He is replaced in August 2007 by early Tesla investor Michael Marks, who is replaced three months later by Israeli engineer Ze’ev Drori. By 2008, Tarpenning is gone, as is Vice President of Electrical Engineering. It’s followed by a layoff of 10% of the corporation’s staff. Sound familiar?
The following month, February 2008, sees the first Roadsters hit the streets, with Musk leading a line of them down Highway 101 in Palo Alto, California in celebration. But the joy is short-lived.
By October, with Tesla’s finances becoming shaky, Musk assumes the role of CEO.
While the company would remain a money-losing operation for another 12 years, it would survive thanks to Musk’s wiliness and Wall Street’s goodwill.
But the Roadster’s debut heralds the beginning of a new battery electric automotive era, although few suspect it. Tesla’s ascendance would remake the nerdy EV into the hippest new automobile of the moment, one that made conventional automaker look outdated using technology that first appeared during the Victorian Era and lead to an onslaught of new EV startups, the most automotive startups in a century.
And while Tesla appears here to stay, the same assurances can’t be said of those who follow.