The Energising of Tesla

Tesla began as a small company with a big heart. Now it’s a large entity with an even bigger plan.

It’s hardly a secret that when it comes to revolutionary start-ups Elon Musk has the Midas touch.

The South African-born inventor first rose to prominence after founding a web software company called Zip2 that was later sold to Compaq, netting him a cool $22 million. He then went on to start a company called X.com, an online payment agency that was renamed PayPal and sold to auction site eBay for more than $1 billion.

In 2002, the father-of-five was a co-founder of SpaceX, a rocket technology company that just last month made history by successfully completing the first commercial rocket launch from the NASA launch pad that also sent astronauts to the moon.

But it’s the start-up that Musk became involved with in 2004 that may yet prove his boldest venture yet.

It was 14 years ago that Silicon Valley engineers Martin Eberhard and Marc Tarpenning founded Tesla Motors with the express aim of wanting to prove that electric cars were a much more viable option than petrol-powered vehicles. The pair, which incorporated the company in 2003, hoped that with instant torque, uncompromised power and zero emissions, the Tesla Motors product would prove the way of the future.

 

Today Tesla Motors, which goes by the simple moniker of Tesla, has more than 186,000 of its electric cars on roads and over 800 supercharger stations worldwide. No longer just a vehicle manufacturer, it is now considered an authority in the solar energy field through its manufacturing of energy storage and solar panel solutions. It has also pioneered the open source movement, stating it will not initiate patent lawsuits against anyone who, in good faith, wants to use its intellectual property. Having publically listed in 2010, as of June last year the company was valued at more than $36.7 billion USD.

But from small seeds, big things grow.

Tesla’s engineers first designed a powertrain for a sports car built around an AC induction motor first patented by Nikola Tesla, the inventor who inspired the company’s name.

However in 2006, when the company’s inaugural vehicle – a high-performance electric sports car they called the Roadster – was still in the testing stage, the media-savvy Musk issued a widely-read blog post in which he aimed to spell out the future direction of the company.

Titled ‘The Secret Tesla Motors Master Plan (just between you and me)’, Musk made it clear that Tesla Motors’ real mission was to accelerate the world’s transition to sustainable energy.

“Starting a car company is idiotic and an electric car company is idiocy squared,” Musk noted.” Yet still he ploughed forward.

 

Musk wrote that the first step in this process was to build a wide range of electric vehicles including affordably priced family cars. This would be achieved through sales of the Roadster. Capable of accelerating from 0 to almost 100kph in 3.7 seconds and achieving a range of nearly 400 kilometres per charge of its lithium ion battery, the Roadster set new standards for electric mobility.

Musk stated that sales of the car, which at the time of launch had a base price of around $100,000, would then fund the development of a medium volume car at a medium price.

In February 2008, Musk took delivery of the first Roadster vehicle and marked the occasion by driving it and four other prototype cars packed with engineers down the streets of California’s Palo Alto and University Ave.

Feeling the pinch of the global economic crisis, later that year Tesla pushed back its launch of its second vehicle, the Model S.

The company’s first electric sedan, Musk revealed that the Model S would have a range of more than 515 kilometres per charge and would be able to move from 0 to 96.5kph in 4.5 seconds. The car was eventually launched to the public in June 2012, but by that time Musk had revealed details of the Tesla Model X prototype, a crossover SUV with highly specialised features including falcon wing doors and a bioweapon defense mode air-filtration system.

 

Due to hit roads later this year, the new Model 3 will be the first mass-production battery electric vehicle to enter the mainstream market and is the Californian-based car maker’s cheapest model yet.

At a local level, Tesla recently announced plans to make its first foray into a department store, by striking a deal with Myer to launch a mini showroom on the sixth floor of the group’s Melbourne CBD store.

But electric cars were not and are not the company’s sole focus.

Back in 2009, just prior to Tesla’s debut on the stock market, German car manufacturer Daimler took a 10% stake in the company after the pair worked together on an electric smart car and agreed to combine resources to work together on developing battery and electric drive systems. By 2014 Tesla was ready to expand those plans and purchased a huge block of land in Nevada on which to build a giant battery manufacturing facility, it would be named Gigafactory.

“The issue with existing batteries is that they suck,” Musk told reporters at the time. “They’re expensive. They’re unreliable. They’re stinky. Ugly. Bad in every way.”

The company anticipated the giant factory would help it dramatically cut the cost of its batteries by “using economies of scale, innovative manufacturing, reduction of waste, and the simple optimisation of locating most manufacturing processes under one roof”.

In 2015, Tesla made a push into energy when it released its new environmentally friendly product line that was designed for use with solar panels instead of traditional electricity sources therefore eliminating greenhouse gases. Described as the “missing piece” in the Tesla business model, the batteries came in the form of ‘The Powerwall’ a giant rechargeable battery for use in the home and ‘The Powerpack’, which was its commercial equivalent. Costing $3,000 USD and $25,000 USD respectively at the time the prices were roughly half that of their competitors.

 

In January, Tesla and electronic goods manufacturer Panasonic teamed together to begin mass production of lithium-ion battery cells, which will be used in Tesla’s second-generation Powerwall and Powerpack products and Model 3.

Model 3 cell production begins this month and by 2018 the Gigafactory will produce 35 GWh/year of lithium-ion battery cells, nearly as much as the rest of the entire world’s battery production combined.

In June last year Tesla acquired Solarcity – the largest solar energy services provider in the US which was founded by Musk’s cousin and whose primary purpose is to design, manufacture, sell, install, maintain and monitor solar energy systems and panels for residential, commercial and government application.

Having clearly delivered on many of the company’s stated goals, last July, a decade after the release of the original, Musk released the Tesla Masterplan – Part Deux.

In it he stated the company had four main goals the crux of which were: to develop “stunning” solar roofs that seamlessly integrate with Tesla’s battery storage; to roll out more affordable vehicles; to advance its self-driving technology; and to roll out a car sharing program that enables Tesla owners to earn an income by renting out their autonomous car.

In addition to consumer vehicles, Musk notes there are two other types of electric vehicle needed: heavy-duty trucks and high passenger-density urban transport.

He says both are already in the early stages of development at Tesla and should be ready for unveiling later this year.

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The Energising of Tesla