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Time to stop calling Tesla a startup

The truth of the Tesla story is impressive enough. Can we dispense with the myths?


If there is a Steve Jobs of Tesla, his name is Eberhard or Tarpenning. Two guys in the Silicon Valley had a big idea and started a company just like in the Apple story, but Musk wasn’t part of that. He came later. From about 2003 until some point Tesla Motors was a startup, let's see if we can figure out when it stopped being a startup and became a mature company.

The first Tesla Roadster was inspired by the tZero built by AC Propulsion. My fonts are limited, or I would write it with a small t and smaller zero denoting “time-start” or “time-zero.” I’m cribbing some of this from a story in Business Insider that I cross-checked with other sources. You should read it. One cool fact is that Tesla Motors was incorporated, named, and the domain name secured by Tarpenning working with Eberhard in mid-2003. Call that Tesla Motors’ t zero. That makes Tesla a 12-year old company now.

With an idea, but no car, these guys knew about VC (Venture Capital) financing and were even smart enough to create a plan and test-launch it to VC companies they knew would not buy-in, but would help them better the plan. One of the company’s initial claims was "…key technologies have recently been developed that make electric cars suddenly very attractive, and the international business climate makes it now possible to build a 'fab-less' car company — a car company without a factory." Another was that the Roadster would cost “less than half that of the cheapest competitive sportscar.” Finally, the car would have zero maintenance for 100,00 miles (other than tires).” Tesla today has a factory in Freemont and is building a “Giga-factory.” Its pricing for the Roadster was never less expensive than competitive cars and Tesla sells maintenance plans.

After some true efforts to find financing, the team decided to approach Musk, who they had known as far back as 2001 talk by Musk they attended. Musk asked hard questions but was interested immediately and bought-in in April 2004. He is still buying in, and he has become the face of the company he did not start. We love him all the same. Maybe more.

After Musk bought in and became Chairman, the company began to start on the Roadster mule, which was done by the end of 2004. Clearly Tesla is still a start-up at this point. There is no product yet. Fast-forward to July 2006 and Tesla has its reveal at a big party including celebrity EV activists. Remember this all takes place seven years after the General Motors EV-1 has come and gone. The Roadster is there, and test-rides are given. Tesla takes 127 orders for the $100K Roadster. Clooney buys his. Tesla is still a startup.

In 2007 Eberhard, one of the two original founders is removed by the board of Tesla during a meeting he was not allowed to attend. Is a startup still a startup after the investors oust the founder? A veteran CEO who also had invested millions in Tesla Motors is brought in to be CEO after Musk takes the temporary position. Then another pro replaces him. Production of the Roadster begins in 2008. The Model S, previously called the “Whitestar” while in development is announced in June 2008. In March 2009 the Model S was shown for the first time.

That year Tesla received a half-billion in funding from the US Department of Energy. Toyota and Daimler had bought-in and shared technology, manufacturing space, and components with Tesla for the Model S. In 2010 Tesla became a public company. Are public companies startups?

The Model S went on sale in June 2012. The current Model S is now very different than the first cars shown and is available with AWD and dual motors. Tesla is truly international, selling much of its 2014 inventory in Europe and partnering in China to sell cars and possibly build cars in the country.

Tesla is planning to finally launch the much-delayed Model X crossover in late 2015. This will be the company’s second “real” car. Ground breaking on the Giga-factory has begun.

Tesla has come a long way in its 12 years. Now in its second decade with over 20 billion in market capital, with operations all over the world, and at one point having been the top selling vehicle in its segment, not the EV segment, but the luxury-performance segment, is it now time that the underdog image and startup moniker be dispensed with? If not, when?


Mark Day (not verified)    April 17, 2015 - 4:38PM

"That year Tesla received a half-billion in funding from the US Department of Energy". Ah, "democracy" - I vote to provide John Goreham a half-billion for something - as long as it's "green". Where to send the check?

Anony (not verified)    April 18, 2015 - 12:33PM

We're all waiting for the Model 3 supposedly targeted @ 35k which yes even I can afford. Until then, I can only drool whenever I see a Tesla Model S zip by silently... ugh I'm sad~ =(

Luke Ottaway    May 2, 2015 - 12:59AM

Is Tesla still a startup? If you believe in relativity, absolutely. Tesla competes almost exclusively with 100-year-old companies that have had ages to perfect the same technology. So as a 12-or-whatever-year old company (that has only really been on the scene for 3 years) making cars drastically differently from those of their competitors, I think we can still call Tesla a startup for quite a while.