9781422270370

ALFA ROMEO: A LEGACY FROM MILAN BENTLEY: THE BEST IN ITS CLASS MASERATI: ITALIAN STYLE AND PERFORMANCE PORSCHE: THE ULTIMATE SPEED MACHINE RANGE ROVER: THE ULTIMATE IN LUXURY ROLLS-ROYCE: INNOVATION AND ASPIRATION TESLA: THE FEELING IS ELECTRIC

Carlie Lawson

MASON CREST M I A M I

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CONTENTS

Introduction .....................................................................6 Chapter 1: Tesla’s Mission ..............................................13 Chapter 2: Cutting-Edge Models Unveiled ......................23 Chapter 3: Worldwide Rapid Growth ..............................51 Chapter 4: Sustainability, Affordability, and Desirability ............................................65 Series Glossary of Key Terms ..........................................92 Further Reading & Internet Resources.............................93 Index ..............................................................................94 Author’s Biography and Credits ......................................96 KEY ICONS TO LOOK FOR: Sidebars: This boxed material within the main text allows readers to build knowledge, gain insights, explore possibilities, and broaden their perspectives by weaving together additional information to provide realistic and holistic perspectives. Educational Videos: Readers can view videos by scanning our QR codes, providing them with additional educational content to supplement the text. Examples include news coverage, moments in

history, speeches, iconic sports moments, and much more! Series Glossary of Key Terms: This back-of-the-book glossary contains terminology used throughout this series. Words found here increase the reader’s ability to read and comprehend higher-level books and articles in this field.

A lthough many readers probably think of Elon Musk when they read the company name Tesla, two other engineers formed the company, initially known as Tesla Motors. In 2003, wanting both a sports car and an electric car as a gift to himself, Tesla founder Martin Eberhard found out that he would have to build it himself. At first, Eberhard thought he’d buy himself a GM EV1, a sporty all electric coupe. GM had just scrapped its entire line of EV1s, created from 1996 to 1999, recalling many of them and destroying them. Eberhard then contacted Lotus, which directed the sports car enthusiast to a British firm that built model vehicles for major

Tesla Inc. was incorporated in July 2003 by a group of engineers who wanted to create the ultimate electric car.

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Tesla: The Feeling is Electric

manufacturers. That company, near closing, turned away the would-be electric sports car owner. Eberhard contacted his business partner and friend, Marc Tarpenning to form a second partnership. Although the pair had first collaborated on an e-book reader, finding out that GM no longer would offer any electric vehicles spurred the two business partners into action. The duo recognized the potential of electric vehicles, the earliest of which hit the roads in Europe during the 1830s, and the U.S. roadways in 1890. They examined the designs of 2003 and found that the only remotely viable

Martin Eberhard is an American engineer, inventor,

and businessman who cofounded Tesla, Inc.

design used a lead acid battery as a power source. With a dangerous battery design and capable of only a short range, Eberhard and Tarpenning chose instead to develop a new vehicle. Neither had run a car company before. They didn’t let that stop them, though, and although manufacturing electric cars flies far afield from creating an e-book reader, Eberhard served as the car company’s first CEO from 2003 to 2007. Teslas’s current CEO, Elon Musk, did enter the picture pretty early, but as a Series A investor in 2004, when the two company founders went in search of venture capitalists who wanted to support the project financially. He later assumed the positions of

Introduction

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Today, Elon Musk is the face of Tesla. He joined the company as an investor in 2004.

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Tesla: The Feeling is Electric

the second chairman of the board of directors and the fourth CEO of the company. In the current mission statement of the company, Musk stated his opinion on starting with a sports car. “Our first product was going to be expensive no matter what it looked like, so we decided to build a sports car, as that seemed like it had the best chance of being competitive with its gasoline alternatives,” he wrote. While Eberhard and Tarpenning didn’t envision exactly what Musk did, all three did share an interest in electric vehicles and a more sustainable mode of transportation overall. Today, each of the three men continues as a shareholder in the company, but Musk assumed the position of lead developmental engineer. That means he decides which vehicle goes into production and which is scrapped.

The brand’s excellent business strategy ensures that Tesla’s revenue continues to perform.

Introduction

11

Initially, Tesla’s main markets were the U.S.A. and China, however, their market share is now worldwide.

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Tesla: The Feeling is Electric

As a team, they contributed to early mission statements and visioning, but by 2006, a year before Eberhard stepped down as CEO, Musk led the mission and vision development. Today, the company’s mission statement carries his byline. Musk owns a controlling interest in Tesla, with 21.7 percent of the shares, while other major shareholders own less than 10 percent each, including the investment firms Baillie Gifford & Co. with 7.7 percent, FMR LLC with 5.3 percent, Capital Ventures International with 5.2 percent, T. Rowe Price Associates with 5.2 percent, and Capital World Investors with 5 percent. The only other individual with major shareholder status, Larry Ellison, owns 1.7 percent of the company. Ellison co-founded Oracle and serves as its CEO. In 2021, the last full year of data, Tesla generated more than $53.8 billion in revenue, an increase of about $22 billion over 2020’s $31.5 billion. The firm’s major earning segments consist of automotive sales, leasing, services, sales of used vehicles, retail merchandise, and energy generation and storage. Of those, automotive sales and leasing generated $1.6 billion, while services generated $3.8 billion, and energy generation and storage generated $2.8 billion. Since its inception in 2003, Tesla has established two primary markets—the U.S. and China. In 2021 alone, the U.S. market generated about $24 billion, while the Chinese market generated about $14 billion. Those figures translate to Tesla earning net income of $5.6 billion in 2021. Continued growth is expected.

Introduction

13

Tesla’s mission was to build an affordable electric car, without compromising on performance and style.

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Tesla: The Feeling is Electric

TESLA’S MISSION The official “Mission of Tesla” reads 1,384 words. Tesla’s chairman, CEO, and product architect, Elon Musk, summed it up when he joined the company. His four-point plan for the firm encompassed three important points: affordable vehicles, zero-emission electric power vehicles, and fun cars. In 2006, Musk revealed his not-so-complex four-point master plan. It went like this: 1. Build a sports car. 2. Use that money to build an affordable car. 3. Use that money to build an even more affordable car. 4. While doing the above, also provide zero-emission electric power generation options. Officially, the mission statement on the company’s website represents its 10-year update, but according to Musk, the goal remains the same. He says he wants to use Tesla to accelerate bringing to market sustainable transportation through compelling electric cars that most people can afford.

Tesla’s Mission

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MISSION, VISION, AND VALUES

Each company, regardless of size, authors a mission statement that communicates why it exists and how it intends to serve its stakeholders, typically thought of as shareholders, customers, and employees. The business follows the mission statement with its vision statement, which offers a description of where the company sees its future in regard to its aspirations and purpose. Both of these statements flow out of the company’s core values—the shared beliefs of the organization. Typically, these statements appear as part of the company’s business plan.

Elon Musk wants to design dream cars accessible to everyone. People who missed his first blog post about Tesla initially treated the company as another sports car company. Musk later explained that although the founders would have liked to bring to market the low-cost, imminently affordable Tesla sedans as its first vehicles, Tesla could not do so as a startup company with no car-manufacturing experience. The company lacked the needed economies of scale. The company set a simple goal for its first vehicle. Its mission in creating the Roadster became the creation of an electric sports car that could compete with gas-powered vehicles in the same class.

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Tesla: The Feeling is Electric

Beyond the Mission and into the Vision In the vision statement for Tesla, Musk writes that he wants the company “to create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles.” This vision statement recognizes the commitment of Tesla to renewable energy overall and prioritizes it in the company’s present and future. Tesla committed itself to the task of globalizing electric vehicles. In order to do that, the company opened production plants across the globe, shortening the time to market and including the populaces of many locations in the development of the vehicles. The company positioned itself to become a key player in the renewable energies industry. Tesla’s Core Values The business names five core values out of its mission and vision: • Do its best. • Constant learning. • Take risks. • Environmental consciousness. • Respect.

Tesla had a mission to bring affordable electric vehicles and charging point technology to the world.

Tesla’s Mission

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Tesla applies these values as the principles that guide its mission and vision. The application of the core values to the day-to day operations of the company ensures its healthy work environment, too. Tesla’s Company Mission Evolves By using a transitional business model, Tesla focused on short-term vehicle development and sales goals while focusing on its overall long-term mission of affordable electric vehicles. The company set its sights on new milestones tied to its goals that fulfill the overall mission of creating affordable, enjoyable, electric vehicles. Rather than just manufacturing an electric vehicle, the Tesla business model tackles the creation of an ecosystem of energy solutions. Electric cars factor at the top of this ecosystem as competitors to gasoline-powered engines and devices of convenience. Today, Tesla’s mission ties in with that of the energy companies owned by Musk, such as the Powerwall devices that can power a home for days using stored energy and the solar panel installations from another of his companies. While Eberhard envisioned the original notion of the Roadster, Musk developed it into the four-point plan that encompassed the starting point of their designs, then segued into the development of Besides Eberhard’s desire for a fun, all-electric ride, entering the sports car segment of the automobile market first let the company create a vehicle that could sell at the same price point as its gas powered competition. While $100,000 to $250,000 sounds expensive to the typical consumer, it offers the entry point in the luxury car segment and the sports car segment. Despite it costing more to produce an electric vehicle, the Roadster would carry a competitive price. lower-cost and more accessible vehicles. Why start with a sports car?

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Tesla: The Feeling is Electric