Tesla Motors

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Andrew Martin
COMM 336
Informative Paper
4/4/2013

Tesla Motors
Tesla Motors is a car company that designs, manufactures and sells electric vehicles. This public company was founded in 2003 by Ian Wright, JB Straubel, Marc Tarpenning, Martin Eberhard and most notably Elon Musk. Its headquarters is located in Palo Alto, California, with its main production plant in Fremont, California. The company was named after Nikola Tesla, a renowned electrical engineer and physicist. Its goal is to increase the number of EV’s (Electric Vehicles) available to the market to help make it more mainstream. Currently, Tesla motors have produced two models, the Tesla Roadster and the Model S, and has unveiled a third, the Model X. In the Future, the company plans to produce family-sized minivans, electric SUV crossovers, and electric fleet vans for municipal governments. Other business includes collaborations with other companies such as Toyota, Mercedes, Daimler, Freightliner Trucks and Panasonic. Although the company has earned much success, it has hit its share of bumps along the way such as lawsuits, recalls and founder disputes.

The company began when two teams wanted to start an electric car company and since their goals were similar, they joined forces to better their chances of success. The most famous of these entrepreneurs, and one of the most important and iconic figures to the company, is Elon Musk. His success began with his first company Zip2, which was bought out by Compaq for $304 million. Then he co-founded what eventually became PayPal, which was bought out for $1.5 billion by Ebay. Elon co-founded a third company named SpaceX in 2002 where he is currently the CEO and CTO. SpaceX is a shipping company, in that it ships cargo with huge Falcon 9 rockets into space, supplying NASA’s cargo to the International Space Station. This leads us to his co-founding of Tesla Motors, where he oversaw the company’s first car, the Tesla Roadster and eventually took the position of CEO.

Tesla Motors is not the first car company to produce pure EVs. In fact, EVs have been around since the 1800’s and outnumbered combustion engine vehicles. Since then, combustion cars held the market and EVs were for the most part out of the automobile scene until the 1900s. GM and several other car companies produced experimental EV’s in limited numbers but their motives were self serving, including fulfilling government emission mandates. GM’s EV1 was leased only and were crushed after the lease was up 3 years later. EV’s first found a foothold in the auto market with the introduction of the hybrids. Toyota’s Prius was the first mass-produced hybrid gasoline electric car, which was introduced to the global market in 2001. To date, the Prius has sold over 2.5 million cars worldwide and is the world’s best selling hybrid. Since then, many other companies have produced their own versions of hybrids such as the Chevy Volt, and the Nissan Leaf, the world’s top selling EV.

From the start, the Tesla Motor company has had a strategy for entering the market as an EV auto maker. It is difficult enough to start a new car company without a long built reputation, but to enter a new and uncharted market is bold and very risky. To do this, Tesla first would build a sports car with low production numbers in order to prove their technology. Next, they would shift do to luxury models that are more affordable and their last step is to build affordable EVs to compete with economy cars already on the market.

In 2008, Tesla Motors started selling its first EV, the Tesla Roadster, which was just a Lotus Elise with a Tesla electric drive system. It was designed to compete with other sports cars in its price range. Not only was it Tesla Motors first production vehicle, it was the first highway-capable all-electric vehicle in serial production for sale in the US, and the first production car to use lithium-ion batteries, allowing it also to be...
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