The History Of Tesla and How They Came To Rule The Electric Car Market

Discover every detail behind how Tesla became the undisputed king of EVs.

By Kristi Eckert | Published

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As a company, Tesla and its CEO, Elon Musk, have grown to become household names. Tesla has a permeating presence that continues to shatter glass ceilings and attain lofty goals many experts thought impossible. Today, Tesla is growing at a rate of 157% per year, making it the fastest expanding brand in the world. In 2021 it saw a net revenue of 53.8 billion dollars. That net revenue was made possible by the 637,350 units the company successfully delivered over the course of the year. Those deliveries are what catapulted the Model 3 into the esteemed position of being the best-selling EV plug-in worldwide. 

Tesla is not only the top EV car company globally, they are an energy empire that is successfully reshaping (at exponentially increasing rates) the energy sources that the world relies on to function. So how did they get there? How did Tesla come to dominate not only the EV industry but drive the future of sustainability? Perhaps it was Elon Musk’s ingenuity. Or maybe the world was just ready for a change. Or it may have just been a little bit of both.  

EARLY EV INSPIRATION

Tesla might never have come to be if it weren’t for an early failed electric vehicle called the EV1 that GM introduced back in the late 1990s. When the EV1 was released in 1996 it became the very first electric car available to the masses. Unfortunately, it was quickly discontinued in 1999 and officially faded into obscurity in 2003 when GM effectively trashed any leftover models they had. Back then it seemed that the general population just wasn’t ready to embrace the massive car culture shift that EVs had the potential to imbue. 

However, despite its lack of popularity, the EV1 did garner a very devoted cult following who absolutely adored the little eco-friendly sedan. Two of the EV1s most devoted fans were pair of Silicon Valley-based engineering entrepreneurs who had built up their own ebook business. The pair of energy-conscious individuals were Martin Eberhard and Marc Tarpenning. Taking inspiration from the EV1, Eberhard and Tarpenning walked away from their ebook business and founded Tesla on July 1, 2003. 

ELON MUSK INCOMING

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Fresh off of a sizable cash out of PayPal investments, Elon Musk poured $6.5 million in capital into Tesla early on. From the start, Musk was Tesla’s largest investor. He dominated series A financing and quickly assumed the roles of designer, inventor, and chairmen of the board.

Tesla’s early mission was clear. The team of founders and investors wanted to build an electric vehicle that looked cool and that would dissolve any preconceived notions that the general public had in terms of the way EVs should look. They also wanted to rectify one of the biggest problems GM’s EV1 had – driving range. To tackle these two conundrums, first, they decided to model the very first Tesla after an appealing high-end sports car – the Lotus Elise. Second, they opted to equip the car with lithium-ion batteries. They chose lithium-ion batteries because they were more powerful than the lead-acid batteries the EV1 had run on. 

Musk, in particular, also had long-term visions for the company. He thought it pertinent that Telsa eventually penetrates economies outside consumer-level EVs. His long terms plans honed in on developing electric-powered commercial vehicles, offering home energy solutions, and investing time into developing driving technologies of the future (i.e. autonomous vehicles). To his credit, he is on the verge or has already begun to realize many of his early visions for the company. 

REVVING THE ROADSTER 

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Tesla’s initial early focus was apparent. They essentially wanted to turn the Lotus Elise into an electric car. Unfortunately, because the team began to deviate from the look and parts that defined the lotus, expenses began to spiral out of control. By 2008 Tesla was in serious danger of going belly-up. This is when Elon Musk decided to officially swoop in and talk the helm. 

To save Tesla from the perils of bankruptcy Elon Musk quickly made sweeping changes across the company. When he officially became CEO in October of 2008, Musk laid off 25% of Tesla’s existing labor force and then preceded to stop production of 75% of the roadsters that were supposed to be made. After enacting those quick cost-cutting maneuvers, he strategically went about acquiring more capital and also formed a crucial partnership with automaker Daimler. The company’s saving grace, perhaps, was the $465 million loan that Musk was able to obtain from the United States Department of Energy. 

After the dust settled, a total of 2,450 Tesla Roadsters were delivered. To the delight of many, the Tesla Roadster wound up being the EV many never thought possible or saw coming. The impressive car had specs to give internal combustion engine cars a run for their money. Upon its release in 2008, the roadster boasted 280 lb./ft. of torque, 288 hp, a top speed of 125 mph, and a 0-60 window of only 3.7 seconds all powered by a 992 lb. lithium-cobalt-oxide battery. However, what really served to perk the ears of the masses was its impressive 244-mile driving range that it could attain on a single charge. The Tesla Roadster was truly the foundation from which an EV revolution would erupt from. 

MOVING ON UP

In 2010, just two years after those initial 2,450 roadsters were shipped, Tesla went public to the tune of $226 million. In celebration, the company quickly got to work on what would become the now-iconic Model S followed shortly after by the Model X. Hitting major milestones soon would become a commonplace occurrence for the dominating electric vehicle company. 

In 2016, Tesla released the Model 3. The Model 3 was developed to be the affordable Tesla that could be driven by the masses. Its release hailed back to the company’s initial vision of helping to power the world more sustainably. The Model 3 only helped Tesla to grow further. Then in 2017, something monumental occurred. Tesla eclipsed Ford in market value when it reached a net worth of $52.3 billion. 

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Despite Tesla’s seemingly unstoppable success, Elon Musk knew that he could not accomplish or adhere to the company’s mission of “accelerating the world’s transition to sustainable energy” without first developing a means by which the costs of Tesla EVs could continuously become more affordable until the time came when EVs became a more economically wise option than their traditional ICE counterparts. Hence, in 2013 Musk announced that Tesla would break ground in the building of the very first Tesla Gigafactory.

The Tesla Gigafactory would, according to YouTube channel Visual Capitalist, “productize the facility so that vehicle assembly could be automated at a revolutionary pace.” Essentially, the Gigafactory would serve as the facility to start the process of making EVs cheaper and cheaper to make. Or as Visual Capitalist put it, “perfect the building of the machine that builds that machine.”

DRIVING BOLDLY THROUGH ALL BOUNDARIES 

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Today, Tesla is continuing, more successfully than ever to tackle and achieve its future visions and goals. This is not only evident in the success and popularity easily discernible by taking a looking at their electric vehicle market share, but also evident in the vitality of their ambitions. Tesla just opened their 4th Gigafactory in Berlin, Germany which is soon to be followed up by their fifth that is currently being built near where the company is now headquartered in Austin, Texas. Elon Musk’s Cybertruck is set to be released any day now. SpaceX is conquering new frontiers off-planet, and Starlink is beginning to revolutionize how the public accesses and utilizes the internet. In less than 20 years since Tesla first got off the ground, they are closer than ever to realizing their ultimate mission. And this time, unlike the fated EV1 the world is finally ready for it.