Clean

The Origins of Tesla

Published Jun 10, 2024, 11:01 PM

While Elon Musk owes much of his wealth to Tesla, the truth is that he's not the company's founder. That honor goes to a pair of engineers named Martin Eberhard and Marc Tarpenning. We explore the origins of Tesla.

Welcome to Tech Stuff, a production from iHeartRadio. He there, and welcome to tech Stuff. I'm your host, Jonathan Strickland. I'm an executive producer with iHeart Podcasts and How the tech are You? So anyone who listens to this show a lot anyway knows that I tend to dunk on Elon Musk quite a bit. But it's okay because he can take it. He's consistently in the running to be the richest person in the world. Last I checked, he was number three, behind lvmh CEO Bernard Arnault and Amazon founder Jeff Bezos. But anyone who can count their wealth using the designation billions is pretty well insulated from a lowly podcaster's opinions, and I believe in punching up, ain't much higher to go than the third richest person in the world. Now, I would argue there are many valid reasons to criticize Elon Musk. While I spend a lot of time lamenting his choices over at X, you know, the platform formerly known as Twitter. Shareholders in his electric vehicle company Tesla have other axes to grind. So I thought I would do an episode about the origins of Tesla because for the first you know year, really they didn't involve Musk at all. He was not, despite his own designations, a co founder of Tesla, depending upon how you want to look at it, And this might come as a surprise to you because often either his his fan base, or Musk himself will portray himself as kind of like the founder of Tesla. But I'm sure a lot of you already know that Elon Musk did not create the company Tesla. For those who don't know that, let's dive into the origins of this company and the people who did create it. But first we actually need to go back before the company existed at all and talk about how the US state of California got the ball rolling with some regulations. So California is a very large state and it has a huge population, the biggest in the United States in fact, with around thirty nine million people. Now, lots of those people have cars, and many of those folks have fairly long commutes to work or to school or whatever. Plus there's all that driving to the beach, which, as the documentary series My Crazy ex Girlfriend tells me, takes two hours three if there's traffic. Well in the twentieth century. All that driving was taking a toll on the state's air quality. Right. Yeah, these internal combustion vehicles putting out emissions and smog was a real issue. In fact, from what I read, it wasn't unusual in the nineteen fifties to step outside in Los Angeles and not be able to see the tops of some of the buildings due to air pollution. Emissions like nitrogen oxides and hydrocarbon gas is were the chief culprit of the visible stuff. Plus there were other gases that were emitted by gas guzzling engines that would pose a health risk to citizens. Now, the US as a whole passed air quality laws, beginning in nineteen fifty five with the Air Pollution Control Act and then in nineteen sixty three with the Clean Air Act. But California would need to do more to keep air pollution in check, and so California's laws go above and beyond what the federal regulations require. In the nineteen seventies, California state agencies began to really take action. This was right around the time there was also a massive oil crisis as well, something that would drive home the need for America to develop technologies that would either burn fuel far more efficiently or preferably rely on some other means to power things like automobiles. Now I'm skipping over a lot of details ranging from global politics to matters of national security on this because we only have so much time, and I've talked about it in other episodes too. But anyway, when we get up to nineteen ninety, California started to make more demanding requirements of auto manufacturers. State regulators with the California Air Resources Board or carb CARB passed a requirement called the Low Emission Vehicle Regulation. The rules meant that manufacturers had to produce light and medium duty vehicles with much lower emissions starting in nineteen ninety four. Further, a percentage of the vehicles that the companies produced and sold in California would have to be zero emission vehicles. So initially, when they first passed this in nineteen ninety, that percentage was just two percent of all the vehicles that they sold in the state. If manufacturers didn't comply, they wouldn't be allowed to sell vehicles in California, though more about that in a bit, And since California is the most populous state in the country, and because so so many people in California drive there, that's a market that a car company cannot afford to lose. So companies had to figure out a way to comply with these regulations. This brings us to General Motors or GM. It was one of several companies working on complying with California's demands, and in nineteen ninety, GM showed off a prototype electric powered concept car called the Impact. Funny name for a car like I guess they had their reasons. I guess they were thinking it was going to make an impact because it's an electric vehicle sports car. But when I think of a car and I hear the word impact, I think things have not turned out the way you had anticipated. Anyway. This prototype, in turn, drew inspiration from the work that General Motors had done with other companies as part of the World Solar Challenge. Now, as that name implies, this challenge was a race between solar powered cars. GM collaborated to design and build a car called the sun Racer. Racer in this case is are a y cer because sun rays and driver John Harvey would use this Sunracer to win the whole ding dang derned thing. Anyway, electric cars were nothing new in nineteen ninety In fact, they were more than a century old at this point. In fact, electric cars pre date gasoline powered vehicles. Making an electric motor powerful enough to propel a vehicle wasn't really the biggest problem. Battery technology was a really huge challenge. But anyway, The Impact was a little two seater coup that GM introduced at the nineteen ninety La Auto Show, kind of as a proof of concept for a modern EV. It used thirty two lead acid batteries for power rechargeable batteries. The Impact would serve as inspiration for a car that GM would actually put into mass production a few years later. This one was called the EV one. EV of course, stands for electric vehicle. The story of the EV one's development and production is really interesting, but obviously I'll leave that for a different episode because this is really more about Tesla. So the important bit for our story is that GM made these cars available only for lease, not for purchase. You could not buy one, you could only lease it, and that started in nineteen ninety six. So while GM made a few production runs of this vehicle, the company owned all of them the entire time. And only leased them to folks in a few states, including my home state of Georgia, we had some of these cars. The EV one had a limited driving range. Reportedly, according to some reviews I read, this was made more confusing by the car's alert system, which would sometimes underestimate how much further the remaining battery charge would be able to take a driver before needing a lengthy recharge session. That's not great if your car is telling you, hey, I'm going to run out of juice in twenty miles, and then fifteen miles later, it's still saying twenty miles that just this is the source of a lot of anxiety. I would argue, actually, that's one of the big hurdles for EV's in general, is this anxiety about driving range. But I read a few reviews of the EV one experience and it sounded pretty much like what you would expect an early modern electric vehicle with predictable limitations. It wasn't bad necessarily, but it was the type of car that would be suitable only for a subset of auto owners, primarily people who would need a vehicle for commuting to and from work and for short trips, but nothing else. GM ended the EV one program in two thousand and one. Presumably the company did this because it was hard to make a profit from this particular project, and the company viewed electric vehicles as a niche that just wouldn't provide enough sales to justify the cost of manufacturing. But the program inspired a couple of other entrepreneurs to launch an upstart car company with the goal of making electric vehicles that folks would actually be able to buy. Now, neither of those entrepren we elon Musk. Rather, they were a pair of engineers, one named Martin Eberhard and the other Mark Tarpening. Now I'll start off by talking about Eberhart. First. I absolutely love the title he has given himself on LinkedIn, which is occasional visionary entrepreneur engineer, which is great. And he also lists his current occupation as enjoying light. So I would say that Eberhard is setting a heck of an example anyway. He attended college at the University of Illinois Urbana Champaigne, where he earned both undergraduate and graduate degrees in electrical engineering. The first job that he lists on LinkedIn dates to nineteen eighty three, where he served as an engineer for a company called Weiss Technology. This was a young company in the computer hardware space, and while Eberhard was there, was chiefly known for the production of computer terminals and personal computers. Eberhard worked there for four years, then he promptly began his entrepreneurial phase. He co founded a company called Network Computing Devices, Incorporated in nineteen eighty seven, and a decade later he would co found Nouveaux Media Incorporated, a company that made ebook readers. His co founder would end up being Mark Tarpining, whom we'll chat about more in just a moment. In an interview, Eberhard revealed that he first got interested in making a new electric vehicle right around the time GM stopped making them. Several factors converged simultaneously to cause this, so, for one thing, in nineteen ninety eight, California began to make changes to its zero emissions vehicle requirements. The state loosened the rules a touch and allowed car manufacturers to earn partial credits toward these requirements by selling low emission vehicles. Eberhardt saw this as quote unquote gutting the zero emissions rules, and it definitely meant that companies like GM had an alternative to producing electric or fuel cell vehicles, so instead of building zero emission vehicles, they could focus on low emission vehicles and meet the requirements that way. That really upset Eberhart and would serve as the genesis for the founding of Tesla. But before we get to that, let's turn to the second founder, Mark Tarpaning. Tarpaning got an undergraduate degree in computer science from the University of California, Berkeley. He met Eberhart, though I don't know the details of how they met, I just know that they met at some point, and the first credit he lists on his LinkedIn profile is essentially the co founding of Nuvo Media with Eberhart. But before that, he worked for a company called Textron tex Tron, As that name somewhat implies, Textron started off as a textiles company. In fact, its original name was the Special Yarns Corporation. These days it does a whole lot more than just textiles, including some heavy duty work in the aerospace and defense industries. So never tick off anyone who knits or crochets. I think that's the takeaway lesson I have here. Turpening's work required him to travel to Saudi Arabia frequently, and he would often take books with him, but he lamented how inconvenient it was to lug those books around on his frequent travels, and that it sure would be nice if he could just, you know, use an e book reader instead and carry an entire library around without having to deal with the weight and the bulk of hard copy books. He had already met Eberhart at this point, and the two decided to co found Nuvo Media in order to design and produce ebook readers. TV Guide in the form of a subsidiary called Gemstar, would acquire Nuvau Media three years after it was founded. Interestingly, Nuvo Media would also help inspire the two till later co found Tesla, as did Eberhard's personal life. So what do I mean by Eberhart's personal life informing the founding of Tesla. Well, I'll explain that in just a moment, but before we get to that, let's take a quick break to thank our sponsors. Okay, before the break, I mentioned that Eberhard was having something happened in his personal life that would end up in a way leading to the founding of Tesla, and that's something was a divorce. So in an interview he said that the divorce is kind of what prompted him to look into getting a sports car. He says, that's what guys do when they get a divorce, they go and they buy a sports car. He was being a little flippant, but tarpeting At was also in this interview and seems to be through his facial expressions, confirming what Eberhard was saying. However, Eberhard wanted this to be a responsible purchase, you know, despite the fact that you could argue that it was somewhat on a whim. He didn't want to get some sort of gas guzzling sports car, and he said that most of the sports cars on the market had absolutely terrible mileage and the state of California was obviously struggling with this infrastructure that had been deeply affected by gas guzzling cars for decades. So he was hoping to get something that would be a little more environmentally friendly. So he had an interest in the EV one from GM, but as I mentioned, GM pretty much nuked that program from orbit. He couldn't buy an EV one. Eberhard reached out to a much smaller almost like a boutique company called AC Propulsion. This company, which launched in nineteen ninety two, designed stuff like electric drive train systems for electric vehicles, and the company had built three tiny little sports cars, almost like an electric go kart. That's how small these things were. They're bigger than a go kart, but not by much. They called them the Zero t ZrO and it made headlines and it was founded by an engineer who had actually worked on GM's EV one back in the day. Eberhard was hoping that AC Propulsion would move the Zero vehicle into production, because again they had only ever built three of these things, but AC Propulsion turned him down. Instead, the company opted to focus on more practical vehicles, not sports cars. One issue that Eberhard noted was that the Zero was relying on older battery technology like the Impact of nineteen ninety That Zero was using lead acid batteries. At Nuvau Media, Eberhard and Tarpening initially used nickel metal hydride batteries for the first generation of their e readers, but then they switched to lithium ion batteries for the second generation, and Eberhard suspected that lithium ion battery technology could be a more viable future for electric vehicles. So he and Tarpening discussed the idea and ultimately this is what would lead them to cofound Tesla Motors around two thousand and two two thousand and three. Now this was a pretty big decision. Tarpaning felt confident that they would be able to make a coumpmpany that could solve the issues of designing the computer and electronic systems that would actually provide propulsion. Essentially, he said that he was pretty sure a Silicon Valleys startup company could make the stuff that would make an electric vehicle go that that part wouldn't be the hard part. He was far less certain about the ability to make a car that would actually go around all these components, like the actual car thing, the chassis, the body of the car, all of that. That was the part where he was like, I don't know if we can do the mechanical systems. We can definitely do the electronic ones and computer systems, but I don't know about the mechanical ones. So how do you go about convincing investors to put money in your idea when you have no record, nothing to point at to say we know how to make vehicles. You might say, hey, we know how to make computer systems and we know how to work with batteries and stuff, but if you can't point to cars, that's kind of a non starter. There's gonna be a lot of car puns in this episode. And I swear as I was writing it, I was like, this is a car pun and I didn't even intend it. I just left them in. Anyway, our two protagonists would need to secure funding for their fledgling company, and that meant they had to seek out investors, and that involved a lot of conversations with movers and shakers and walk in wallets, and around this time they hired employee number three. Employee number three was a guy named Ian Wright, not the British soccer player Ian Wright, but rather an engineer who had worked as a director for Cisco Systems as well as a CTO for all Tomar Networks, among other things. And one early decision for Eberhart and company was the type of vehicle that they wanted to focus on first. So the idea to make that ev sports car that Eberhart had wanted in the first place kind of became the driving force for Tesla. Again. More unintentional Hart puns not to satisfy Eberhart's desire to have another sports car. That's not the reason why they wanted to go this way, or at least not the main one. Instead, it was because the founders felt that a sports car would attract early adopters, people with deep pockets who wanted something cool like an electric vehicle sports car. They knew that the first Tesla vehicles were going to be expensive. That was going to be a given. It's just it was going to be expensive to make them, and so they'd have to be expensive to purchase. A company couldn't exist otherwise. Hardware often brand new hardware typically is really expensive, like consumer hardware if you were around whenever any new technology launched, like Apple Vision Pro is a pretty good one. I mean, there are other mixed reality headsets out there, but Apple's Vision Pro headsets are thirty five hundred dollars to start off. They get more expensive from there. That's largely because of all the money that went into R and D and manufacturing companies want to recapture that stuff. And it's only after a new technology reaches a certain level of a adoption that a company can switch into sort of a mass production mode and bring the costs of manufacturing down, which in turn can bring the cost of a product down. But at the beginning, it's going to be expensive, So putting out a sensible hatchback electric vehicle probably wasn't going to cut it. No one would be willing to pay what it was going to cost. So the team committed to designing and producing a sports car, and they decided ultimately they would call it the Tesla Roadster. Now that whole process would take five years. The team had a full car to design in that five years, and Eberhard and Tarpeening would start off by attending an La auto show and they met with representatives from Lotus. So Lotus is a car company in England. It traces its history back to nineteen fifty two. And the Tesla engineers had discovered that it's not unusual in auto manufacturing to outsource a lot of the stuff that you use to build your cars. You know, that might be things like latches or safety equipment, or all sorts of different things, and it meant that they didn't have to make everything themselves. But they didn't really know how to go about creating those relationships with suppliers, and so they figured, we'll go to the LA Auto Show. We'll see if we can meet with some of the representatives from the various car companies and see if we can start to form a relationship that will help us in our path to making this sports car. So again they met with these folks from Lotus and they kind of gave an early pitch of what they were trying to do to the company. You know, they're like, well, why should we reinvent the wheel when we can work with a company like Lotus that has already done all this. Plus, you know a roadster has to have like four wheels. That's way too much inventing. So, according to Tarpaning and Eberhard, the folks at Lotus said that the pitch was interesting, but they should all have a full meeting about this back in England to discuss things further back at Lotus's headquarters. Tarpaning cleverly pointed out that this is a great way for Lotus to make sure that the pair were actually serious about their business venture, because flying to another country in order to have a sales pitch meeting, that's a big request and a lot of startup folks would potentially bulk at that, but by showing up to actually follow through on a pitch, that showed that Eberhard and Tarpaning were committed to this idea. So they went to England and the reps from Lotus said that if the team could secure sufficient funding, Lotus might partner with them to help with the process of building out an actual vehicle. This gave Tesla an early advantage because it meant that they could go to potential investors, they could lay out their plan and they could even indicate that Lotus was a potential partner for them, and that could help build confidence in the company and the project and to more investors to actually pour some serious money into the operation. They could say, yeah, we don't know anything about building a car. We know how to build all the electronic systems, but our partner is Lotus, and that's a car company with more than half a century's worth of experience in this space. So that was a big help. When they walked into different boardrooms with venture captalysts and were making their pitches, well, one of those early conversations was with Elon Musk, and Elon Musk was already into his own entrepreneurial phase where he was using his already considerable wealth to get involved in a lot of different things, and he got excited about this idea from Eberhart and Tarpaning. And in fact, this was not their first meeting with Musk. They had actually met him several years earlier. They were founding members of the Mars Society, which is a nonprofit organization that advocates for human astronauts to go to Mars. Dusk obviously has a very deep interest in this as well, and years before he would go on to found SpaceX, Musk attended a conference by the Mars Society, and Eberhard and Tarpening attended that conference and they went to the talk, and after the talk they approached Musk and they talked to him for a while. But this was not the point where they got him on board as an investor for Tesla. They did meet with him again once they encountered some other issues with potential investors. They kept running into issues where folks just wouldn't commit, and it was growing very frustrating. Meanwhile, AC Propulsion, that company I talked about earlier that made the relatively small electric sports card the zero. They had been trying to court Musk, but they gave up on their efforts. The two parties just didn't see eye to eye on anything. But this gave Eberhard and Tarpening the oppertunity to reach out to Musk instead, And at this point, Musk was just around founding SpaceX, and so he invited the pair of Tesla engineers to his startup HQ. Tarpining then said in an interview that pitching to Musk was very different from other venture capitalists because most of the folks that they had encountered had said that their concept for an electric sports car was just bonkers, that it would never work. They couldn't even see how you could build it, So they would get shut out of a lot of those venture capitalists conversations pretty early. But Elon Musk was in the middle of launching a startup that was dedicating its efforts toward the space industry. And for a startup to be going into like creating private space craft, that's such an audacious goal, it's such a hard thing to do that, by comparison, a company trying to make an electric sports car seemed absolutely mundane. So Elon Musk is like, well, of course he can do that. I'm trying to go to so building an electric car that doesn't seem like that's that big a deal. So the two told Musk that their plan was to use the sports car as a way to convince people that electric vehicles don't need to be tiny, they don't need to be ugly. They could be stylish and sexy and fast and impressive, as well as practical and environmentally friendly, and that this would give Tesla the momentum to follow a roadmap that would involve introducing other types of cars, including ones more practical for families and such. So in April two thousand and four, Musk initially contributed around six and a half million dollars of his own money as an investment into Tesla in its series A round of funding. Now, I've done episodes about funding rounds before, but generally speaking, you typically have seed investments early on. This is just to get things even moving at all, and then you have rounds of fundraising where you get investors to put money into a project, and a company might have several of these before it ever has any other means of generating revenue. Like that's not revenue obviously, but generating money so that they can operate because obviously otherwise you would just run out of cash and the whole thing would go bankrupt. So Musk's contribution was the vast majority of the first round of investment, and it was around another million dollars provided by other investors, but the primary investor was Musk. So Elon Musk became the chairman of the board of directors for Tesla. Martin Eberhard was named CEO of the company, and the engineers got to work designing the roadsters systems. Now, as they would say in later interviews, everything was difficult. They had to invent all the computer and electronic systems from scratch. There was no model to follow. They had done some rough estimations and concluded that they should be able to actually do what they wanted to do from a purely technical standpoint, like, the amount of electricity they could generate using the battery packs should be sufficient for running the car. The battery packs shouldn't be too large or heavy or bulky to impact the design or operation of the vehicle. Right. They did all the math to make sure that the approach they were going to take was a practical one, but that was just math and hypotheticals like actually making the physical things. That's got its own set of challenges. So to bring their concept to life would take many hours, in fact, years of hard work. Okay, we're going to take another quick break. When we come back, i'll talk more about the early years at Tesla. We're back. So while the engineers are actually working on figuring out the systems for Tesla, Musk was helping in the efforts to secure more rounds of funding. Ultimately he would raise more than one hundred million dollars in multiple rounds. In those early years, Musk himself contributed millions more dollars in investments, like when one of his other investments would pay off, he would invest some of that back into Tesla. So the already wealthy Musk was securing a growing amount of equity in Tesla and that would seriously pay off down the road, so to speak. So one early technical challenge that the engineers faced had to do with battery safety. This was not something that they had anticipated, but in the mid two thousands, in that first decade, lithium ion batteries were starting to make the news due to some spectacular and dangerous failures involving Dell laptops. There were stories of Dell laptop batteries failing and then entering into thermal runaway. That's where a battery begins to overheat and the cycle perpetuates itself, which leads to battery failure, and this can include combustion or even explosions. So this convinced the Tesla team that they needed to test their own lithium ion battery cells for thermal runaway. So a battery pack consists of many battery cells, right, and they wanted to see what would happen if they forced their battery cells into a thermal runaway situation. And the way they did this was a very diy approach and also what I would probably call an error in judgment. So they went to Eberhard's house, They dug a hole, they put a battery cell in the hole, They weighed down the battery cell with various stuff, and then they pumped enough juice into the battery to force it into thermal runaway. And the results were apparently very impressive, not in a good way, but in a scary way. However, it did set the team on a journey to find out how to design the battery cells for the Tesla in such a way that should one cell experience thermal runaway, that would not then spread to adjoining battery cells. And thus this way it could limit the danger of a cell failing it would still be dangerous, but not as dangerous as having, you know, an entire array of battery cells that are arranged in a giant battery pack suddenly going nuclear on you. That would be really bad news. So they got to work fixing that, and you know, they found engineering ways to mitigate the risk, and the team had tons of different tasks like this. Everything about designing the Tesla Roadster kind of followed that path where they would say, oh, the approach we wanted to take, it turns out this is not totally reliable. Like sometimes when we build a battery pack, the connections don't all work, which means that you can't rely on this particular approach for manufacturing, which means we can't do that right because if one out of every four or five of your battery packs doesn't work because the welding contacts aren't right, that's a deal breaker. So they had to keep innovating and finding new ways to do things in order to make a system that was actually workable. So beyond all that, they had to figure out how to cool the system down, they needed to be able to insulate it. Not just cool it down, but also insulate it because electric batteries can take a really long time to ramp up in colder temperatures, and presumably at least some of the folks who wanted an electric sports car would be driving them in places that could get a bit more chilly than central California, so they needed to figure that stuff out too, And the work that Tesla engineers did in battery technology would go on to become essentially the standard for much of the automotive industry that was working in evs later on. The pioneers at Tesla created dependable, replicable methodologies when none existed before. The company was hard at work for the first few years just ironing out all these technical challenges. On top of that, they faced issues with suppliers for stuff that was pretty mundane. It turned out a lot of suppliers were skeptical about Tesla, and a lot of them were reluctant to do business with this startup. But a car needs certain things like seat belts and airbags and other standardized equipment that has to meet governmental regulations. So smoothing out those relationships with suppliers and getting buy in from them took a lot of early work as well. That work was starting to pay off, however. In two thousand and six, Tesla had a prototype vehicle that they could actually show off. So it was still a couple of years out from actual production, but this would help establish Tesla as a serious brand. They officially unveiled the Tesla Roadster at a fairly exclusive event in Santa Monica, California, on July nineteenth, two thousand and six. The company was still kind of in stealth mode at this point, so this wasn't like a huge, huge media splash, but it was important for Tesla to get this in front of investors and potential investors. So one thing that Tesla did that was a little bit unusual is that it began to take pre orders for the Tesla Roadster. Now, this was a new idea in the auto industry. Tesla invited people of means, people who could afford to do this, to join what they called the Tesla Roadster Club. This was a club that had a hefty membership fee. Essentially, it was a waiting list, so premium buyers, those who wanted to roadster as quickly as they could get one, would have to PLoP down fifty thousand dollars for a membership into this club. The patient buyers could dedicate thirty grand to becoming a member that would still guarantee them the ability to buy a roadster, but only after all the premium buyers got theirs first. Tesla said the membership fee was fully refundable and that members would get their money back the quote day that you confirm your option selections, which is three months prior to the production of your Tesla Roadster end quote. So essentially this was just a reserve on a car. This actually grew out of a trend that the team had already noticed amongst some of their investors, because some of those folks were calling up Tesla and asking to pre pay for a Tesla Roadster so that they would get one as soon as they were available. The price tag was right around one hundred thousand dollars, like it all depended on the options you got, but you're talking like one hundred grand. That is a lot of money to just PLoP down with Tesla to put down on a car that doesn't even really exist yet, not as a production model anyway, and yet some investors were doing this. This necessitated making a list of pre orders, and people got very interested on where on that list they fell. Became kind of a status thing with Elon Musk, right, they're at the very tippy top. But it was clear that folks were really getting excited about the Tesla Roadster, and even though it was going to be monstrously exc expensive, there was a market for this vehicle. Might have been a small market, but it was there. So those were nice indicators for the company. But behind the scenes, things weren't all on a positive trajectory. For one thing, the development cycle for the Roadster was taking longer than initially anticipated. Things were going past deadline, things were going way over budget, and since this was a privately funded company, it meant that Tesla was burning through investor dollars pretty quickly. Elon Musk was getting a little bit upset about all this, and there are a lot of different takes on what would follow. So I'm trying to be objective as I can and to stick with the facts as I understand them. But you should know that what I'm going to say next like, there are multiple variations of this story and how it unfolded, and I honestly don't know what the full truth is. But Elon Musk, as chairman of the board, apparently met with other board members, some of whom had just joined Tesla because of, you know, early investments into the company, and they decided that Eberhard wasn't cutting out as the CEO, and so Musk essentially fires Eberhard tells him to step down as CEO. Technically, Eberhard was given a different position within the company, but as he would later say, he felt he had been quote unquote voted off the island, and so in two thousand and seven, Eberhard, one of the co founders of the company, leaves Tesla. Initially an investor named Michael Marx was named as interim CEO. Now, whether or not he was interim CEO from the get go or that was something they called him after the fact, that's something that some sources dispute. Most of them, though, just referred to him as an interim CEO. He would serve as CEO of Tesla for a little less than a year, and Musk would then replace him with an Israeli American entrepreneur named Zev dry So. Drory had worked at IBM in their semiconductor division back in the nineteen sixties. He then left to work at Fairchild Semiconductor. Then he left that in nineteen seventy to build his own semiconductor company called Monolithic Memories, and nearly two decades later that company would merge with Advanced micro Devices, which is better known as AMD. Drury was brought in as the new CEO of Tesla in late two thousand and seven, so his main job was to lead the company while the roadster finally went into production, which happened in two thousand and eight. But that was also a year where the world went into a financial crisis. The real estate crisis happened. There was like this massive blow to the economy. So it was a really tough time, especially if you know you had been looking forward to buying a one hundred thousand dollars sports car that was an electric vehicle, and now like there's a giant financial crisis in place. It's tough. So Tesla was also affected by this. Reportedly the company was running on fumes toward the end of two thousand and eight, even with the Roadster finally rolling off production facilities, Musk chose to replace Drfy with well with himself. Musk became CEO of Tesla in late two thousand and eight. Tesla also held a couple of rounds of layoffs to reduce operating costs while trying to get to the finish line. It sounds like it was a pretty tough time at Tesla, and Musk bet big time in the company. If that had not worked out, he would have lost a huge amount of his wealth. But as it turns out, the bet ultimately would pay off, though it would be several years later before that became evident, so it wasn't even like a sure thing. When the Roadster it came out, people were predicting that Tesla was going to fizzle out. Meanwhile, the co founder of the company, Mark Tarpening, also left Tesla. He left in two thousand and eight, after Eberhard did in two thousand and seven. He made this decision before the Roadster was actually ready, so he both of the co founders of Tesla left the company before the Tesla Roadster, the first vehicle produced by the company, was rolling off to customers. Both of them had left by then, and Tarbaning said his decision was due to the fact that his team had worked very hard for five years to get the Tesla Roadster into production, and that the company was then preparing to transition from the Roadster to developing the next car, which was the Model S and Tarpaning anticipated that would take another five years, and he decided that he would rather step back and spend more time with his family. So in two thousand and eight he also left Tesla's which would leave Elon Musk as the leader of the company, a position that he's held ever since. And Tesla is the real reason why Elon Musk is a billionaire. He was already rich before he got involved with Tesla. He had access to generational wealth before he got into business at all. But Tesla, a company he didn't build but he did help fund, would put him on the billionaire's club. The roadster would have its own interesting life once it made out out of production. Not all reviews of the Roadster were particularly kind. There was a rather infamous top Gear episode that kind of slagged off on the Roadster, but the vehicle did help set Tesla on the path for viability, if not success. The company would encounter other roadblocks along the way. To this day, there are still folks who think that one Elon Musk's compensation package with Tesla is way too high it's become a matter for court systems to get involved. And two Elon Musk needs to spend more time focusing on Tesla or to create some sort of succession plan so that someone else can take over the company instead of wasting time on X. Those are the thoughts of various shareholders, by the way, which I agree with, But I have a personal disdain for Elon Musk, so I am a very biased person and I fully admit it. But anyway, all of that is a topic for a different time. That is the origin story for Tesla. To me, it's really fascinating that it's a company where you had a couple of engineers get together. They had a very specific goal in mind, they were able to secure funding, and they were able to pursue that goal, and then both of them left the company before the fruition of their efforts became an actual thing that people could purchase. That to me is kind of a crazy story. And obviously there's a lot more to Tesla's story than that. There are a lot of elements that we didn't even get close to touching on, things like autopilot and full self driving and all of that stuff that would require multiple episodes. But I just wanted to focus on the beginning of this because I thought the story itself was really interesting and one that you don't hear very much because I think Tesla is so closely associated with Elon Musk. But the truth is, for the first several years, Elon Musk really had nothing to do with the day to day operations of that company. It was only starting around two thousand and seven that he began to take a much more active approach. I mean, he definitely did a lot to help get it funded and to keep it funded. So that's not a small thing like that's an accomplishment all on its own, and I don't want to take anything away from that that I think is absolutely key to Tesla's existence, let alone success. So there we have it. We'll probably come back to Tesla at some point. I'll talk more about its history and its evolution over the years, but that's it for the origin story. I hope all of you are well, and I'll talk to you again really soon. Tech stuff is an iHeartRadio production. For more podcasts from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or wherever you listen to your favorite shows. Yea y

In 1 playlist(s)

  1. TechStuff

    2,435 clip(s)

TechStuff

TechStuff is getting a system update. Everything you love about TechStuff now twice the bandwidth wi 
Social links
Follow podcast
Recent clips
Browse 2,432 clip(s)