Tesla, Inc.

    Tesla, Inc. is an American electric vehicle and clean energy company based in Palo Alto, California. Tesla's current products include electric cars, battery energy storage from home to grid-scale, solar panels and solar roof tiles, as well as other related products and services. In 2020, Tesla had the highest sales in the plug-in and battery electric passenger car segments, capturing 16% of the plug-in market (which includes plug-in hybrids) and 23% of the battery-electric (purely electric) market. Through its subsidiary Tesla Energy, the company develops and is a major installer of solar photovoltaic energy generation systems in the United States. Tesla Energy is also one of the largest global suppliers of battery energy storage systems, with 3 GWh of battery storage supplied in 2020.

    Founded 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. Elon Musk, who contributed most of the funding in the early days, has served as CEO since 2008. According to Musk, the purpose of Tesla is to help expedite the move to sustainable transport and energy, obtained through electric vehicles and solar power. Tesla began production of their first car model, the Roadster, in 2009. This was followed by the Model S sedan in 2012, the Model X SUV in 2015, the higher volume Model 3 sedan in 2017, and the Model Y crossover in 2020. The Model 3 is the world's all-time best-selling plug-in electric car, with more than 800,000 delivered through December 2020. Tesla's global vehicle sales were 499,550 units in 2020, a 35.8% increase over the previous year. In 2020, the company surpassed the 1 million mark of electric cars produced.

    Tesla has been the subject of numerous lawsuits and controversies arising from statements and acts of CEO Elon Musk, allegations of creative accounting, allegations of whistleblower retaliation, alleged worker rights violations, and allegedly unresolved and dangerous technical problems with their products.

History

    Founding (2003–2004)

    Founded as Tesla Motors, Tesla was incorporated on July 1, 2003, by Martin Eberhard and Marc Tarpenning.[9] Eberhard and Tarpenning served as CEO and CFO, respectively.[10] Eberhard said 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".[11]

    Ian Wright was Tesla's third employee, joining a few months later.[9] The three raised US$7.5 million in series A funding in February 2004 from various investors, including Elon Musk, who contributed the vast majority at $6.5 million.[9][12] Following the investment, Musk joined the company[10] and became chairman of the board of directors.[9] J. B. Straubel joined Tesla in May 2004.[9] 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.[13]

    Roadster (2005–2009)

    Musk took an active role within the company and oversaw Roadster product design at a detailed level, but was not deeply involved in day-to-day business operations. From the beginning, Musk consistently maintained that Tesla's long-term strategic goal was to create affordable mass market electric vehicles.[14] Tesla's goal was to start with a premium sports car aimed at early adopters and then moving into more mainstream vehicles, including sedans and affordable compacts.[15]

    In February 2006, Musk led Tesla's Series B $13 million investment round which added Valor Equity Partners to the funding team.[citation needed][12] Musk co-led the third, $40 million round in May 2006. This round included investment from prominent entrepreneurs including Google co-founders Sergey Brin and Larry Page, and former eBay President Jeff Skoll.[16] A fourth round worth $45 million in May 2007 brought the total private financing investment to over $105 million.[16] Prototypes of the Tesla's first car, the Roadster, were officially revealed to the public on July 19, 2006, in Santa Monica, California, at a 350-person invitation-only event held in Barker Hangar at Santa Monica Airport.[17]

    In August 2007 Eberhard was asked to step down from his CEO position by the board of directors.[18] 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.[19] In August 2007, Michael Marks was brought in as interim CEO, and in December 2007, Ze'ev Drori became CEO and President.[20] Musk succeeded Drori as CEO in October 2008.[20]

    Tesla began production of the Roadster in 2008.[21] By January 2009, Tesla had raised $187 million and delivered 147 cars. Musk had contributed $70 million of his own money to the company.[22] Later that year in June 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 engineering and production of the Model S sedan, as well as the development of commercial powertrain technology.[23] Tesla repaid the loan in May 2013, with $12 million interest.[24]

    IPO, Model S, and Model X (2010–2015)

    In May 2010, Tesla purchased what would later become the Tesla Factory in Fremont, California, for $42 million,[25] and opened the facility in October 2010 where Model S would be produced.[26] The next month, on June 29, 2010, Tesla Motors launched its initial public offering (IPO) on NASDAQ, the first American car company to do so since the Ford Motor Company had its IPO in 1956.[27] The company issued 13.3 million shares of common stock at a price of $17.00 per share, raising $226 million.[28]

    In January 2012 Tesla ceased production of the Roadster, and in June the company launched its second car, the Model S luxury sedan.[29] The Model S won several automotive awards during 2012 and 2013, including the 2013 Motor Trend Car of the Year,[30] and became the first electric car to top the monthly sales ranking of a country, when it achieved first place in the Norwegian new car sales list in September 2013.[31] The Model S was also the best-selling plug-in electric car worldwide for the years 2015 and 2016.[32]

    Tesla announced the 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" or "HW1".[33]

    In April 2015, Tesla entered the energy storage market unveiling its Powerwall home and Powerpack industrial battery packs.[34] The company received orders valued at $800 million within a week of the unveiling.[35]

    Tesla launched its third vehicle, the luxury SUV Model X, in September 2015.[36] By this time, the company was selling over 10,000 vehicles per quarter.[37]

    Global expansion (2019–present)

    In recent years the company has been expanding their production capacity globally. Tesla opened its first Gigafactory outside the United States in Shanghai, China, in 2019. The Giga Shanghai was the first automobile factory in China fully owned by a foreign company, and was built in less than 6 months.[51] The following year Tesla also started construction on a new Gigafactory in Berlin, Germany, and another in Texas, United States. In March 2020, Tesla began deliveries of its fifth vehicle model, the Model Y crossover.[52]

    On January 10, 2020, Tesla reached a market capitalization of $86 billion, breaking the record for greatest valuation of any American automaker.[53] On June 10, 2020, Tesla's market capitalization surpassed those of BMW, Daimler and Volkswagen combined.[54] The next month, Tesla reached a valuation of $206 billion, surpassing Toyota's $202 billion to become the world's most valuable automaker by market capitalization.[55] On August 31, 2020, Tesla had a 5-for-1 stock split following the increase in value.[56]

    From July 2019 to June 2020, Tesla reported four profitable quarters in a row for the first time, which made it eligible for inclusion in the S&P 500.[57] Tesla was added to the index on December 21 of the same year.[58] It was the largest company ever added, and the sixth-largest company in the index at the time of inclusion.[58] As investors tried to buy more shares as a result of this inclusion, some analysts, such as J.P. Morgan's Ryan Brinkman, suggested investors exercise caution as Tesla was "dramatically" overvalued.[59] In 2020, the share price of Tesla increased 740%,[60] and on January 26, 2021, its market capitalization reached $848 billion,[61] more than the next nine largest automakers combined and making it the 5th most valuable company in the US.[62][63]

    In October 2020, Tesla told Electrek that they had dissolved their PR department (with the exception of a few PR managers representing Tesla's European and Asian markets), becoming the first automaker to do so.[64]

    Tesla hit its goal of building a half-million cars in 2020.[65] The company ended the year with over $19 billion of cash,[66] compared to $6.3 billion at the end of 2019.[67]

    In February 2021, it was revealed that Tesla had invested some $1.5 billion in the cryptocurrency Bitcoin, and the company indicated it would soon accept Bitcoin as a form of payment.[66][68] In the first quarter of 2021, Tesla sold some of the Bitcoin it had invested.[69] In late March 2021, Tesla started accepting Bitcoin as a form of payment in the United States and claimed that they would introduce Bitcoin payment in other countries later that year.[70] On May 12, 2021, Tesla indicated via a tweet from Elon Musk that they would no longer accept Bitcoin as a form of payment due to climate change concerns.[71][72] This resulted in the price of Bitcoin dropping by around 12% on May 13.[73]