The history of Elon Musk's Tesla

In July 2003, Silicon Valley engineers Martin Eberhard and Marc Tarpenning formally founded Tesla Motors, named after famous Serbian-American inventor and engineer Nikola Tesla. The duo would later be joined by Ian Wright, the company’s third employee.

Elon Musk would hop on board in February 2004 as the largest investor in the company, fueling Tesla through cash earned from selling his stake in PayPal two years earlier. J.B. Strausel would join in May 2004 as chief technical officer.

Due to a lawsuit settlement agreed to by Eberhard and Tesla in 2009, all five men are considered the company’s co-founders. Eberhard sued after he was ousted as CEO, alleging that his successor, Musk, was trying to “rewrite history.”

A prototype of the Lotus-based Tesla Roadster was first revealed by Tesla in July 2006, before deliveries began two years later; the first recipient of the Roadster was Musk in February 2008. By the next month, regular production was up and running

The Roadster was Tesla’s first-ever electric vehicle — or product in general — and was a major “milestone for the company and a watershed for the new era of electric vehicles,” according to then-CEO Ze’ev Drori. Drori took over as chief executive in 2007, after Musk pushed for Eberhard to step down.

Tesla sold 2,450 Roadsters for $109,000 each until the line was discontinued in January 2012. Known celebrity buyers include actors such as George Clooney and Matt Damon, musicians like Michael “Flea” Balzary of the Red Hot Chili Peppers and Will.i.am., and former California governor and movie star Arnold Schwarzenegger.

Tesla is set to unveil a second-generation Roadster by the end of the year, with production scheduled for 2025, according to Musk. He’s boasted that it will have “rocket technology” used by his other venture, SpaceX.

The late 2000s was a rough time for U.S. businesses, and the auto industry was no exception; Chrysler and General Motors were both forced into bankruptcy by the 2008-2009 financial crisis, while Ford Motor Co. barely avoided a similar fate.

Elon Musk briefly saved Tesla from bankruptcy through a $40 million investment, which he later followed up with a $40 million loan. That same year, he was named CEO, taking over for Ze’ev Drori.

But Tesla was still on the brink of falling apart. In June 2008, the Department of Energy gave the carmaker $465 million in low-interest loans, much of which was directed toward producing the newly-announced Model S luxury electric vehicle.

However, it was Daimler — now Mercedes-Benz — that bailed Tesla out. The German automaker took a nearly 10% stake in Tesla for $50 million, saving the company from death’s door.

“Daimler’s $50M investment in May 2009 was the crucial money that saved Tesla,” Musk said in a post on X last month. “We would have bounced payroll one month later.”

Tesla officially launched on the Nasdaq on June 28, 2010, becoming the first U.S. carmaker to go public since Ford Motor Co. in 1956. The automaker raised $226 million through its initial public offering, selling 13.3 million shares at $17 each.

Fast forward nearly 14 years and Tesla is one of the most valuable companies in the world with a $570 billion market capitalization. However, the electric vehicle maker is having a rough year, and remains the worst performer in the S&P 500 year to date.

In May 2020, Toyota agreed to invest $50 million in Tesla, which planned to takeover the NUMMi plant in Fremont, California, that had been jointly operated by the Japanese carmaker and General Motors since the 1980s. The facility would become Tesla’s flagship — and, for a time, only — factory in the U.S. The facility is the only production site for the Model S and Model X, but also produces the Model 3 and Model Y.

Tesla’s driver assistance system, Autopilot, was first introduced to the world with Model S sedans in October 2014, although it wasn’t active. About a year later, the automaker released software enabling Autopilot as a feature combining adaptive cruise control and Autosteer, a lane-centering function.

In a blog post, Tesla explicitly states that Autopilot is designed for convenience and “relieves drivers of the most tedious and potentially dangerous aspects of road travel.”

Elon Musk in January 2016 makes the first of many broken promises related to Autopilot, and later its Full Self-Driving driver assistance system, promising that Teslas will be able to drive better than humans within three years. He also pledged that owners can “summon” a Tesla “anywhere connected by land & not blocked by borders”; the feature has a distance limit of 213 feet, according to Tesla’s Model Y owner’s manual.

Later that year, multiple people would die in related incidents, including Joshua Brown of Canton, Ohio. The Tesla enthusiast was killed in Florida after his Model S crashed into a truck, which U.S. auto safety regulators later determined was caused by an over-reliance on Autopilot. The crash was the first Autopilot-related death in the U.S. and would lead to updates to the software.

Several crashes would occur in the future, some of which led to lawsuits. Last October, Tesla won its first U.S. jury trial over a fatal Autopilot crash. However, the company faces at least a dozen more cases in the U.S. Tesla has also found itself in hot water with regulators, consumers, and investors who say the company’s marketing of FSD and Autopilot is misleading and deceptive.

Elon Musk is known for many things. One of them is an obsession with posting on social media. Sometimes that’s a good thing — especially as he now owns X, formerly Twitter — but very often it has negative consequences.

“Am considering taking Tesla private at $420. Funding secured,” Musk wrote on Twitter on August 7, 2018. “Shareholders could either to sell at 420 or hold shares & go private.”

That tweet raised many questions — namely, who would fund his sudden push for privatization — and triggered suspicion from the SEC and shareholders. Subsequent lawsuits cost Tesla and Musk $40 million, and a settlement with the SEC forced Musk to step down as Tesla’s chairman and have his social media posts supervised by lawyers.

The Tesla CEO has since gone to court to remove the supervision requirements — which he has labeled a “muzzle — and most recently asked the U.S. Supreme Court to review his appeal after a lower court upheld the SEC’s order. Last week, the Department of Justice asked the court to dismiss the appeal.

Tesla launched the Model Y SUV in March 2019 as the final addition to the electric vehicle maker’s “sexy” lineup (Tesla sells the Model S, E, X, and Y). The Model Y entered production at the Fremont, California, in January 2020 and is now produced at three other factories. In the years since, the electric SUV has dominated the EV field, becoming the first electric model to claim the title of the world’s best-selling car. 

China is, by and large, the largest auto market in the world. In May 2018, Tesla decided to cash in, launching a Shanghai-based subsidiary to carry out production in the country. Elon Musk later signed an agreement with the Shanghai regional government to build its third gigafactory, Giga Shanghai, which began operations in 2019. The factory currently builds Model 3 compact cars and has a production capacity of over 950,000 units per year.

Tesla decided to pick up the speed in 2022, opening two new gigafactories: Giga Texas and Giga Berlin-Brandenburg.

Construction on the gigafactory in Austin, Texas, began in July 2020, before it was completed in April 2022. The factory produces Tesla’s best-selling Model Y SUVs and the Cybertruck electric pickup (more on that later). It’s also Tesla’s modern-day corporate headquarters and employs more than 20,000 people.

Giga Berlin-Brandenburg was first announced by Elon Musk in November 2019 as Tesla’s first plant on the European continent, specifically in the Brandenburg state of Germany. The factory opened in March 2022 and assembles the Model Y and electric vehicle battery cells; Tesla claims it’s the first facility in Europe to make both vehicles and their batteries.

Elon Musk made a major promise in November 2019 when he introduced the Cybertruck, his vision for the “truck of the future” and said it would be entering production in 2021. The first model of the “trapezoid on wheels,” as it has been not-so-lovingly nicknamed, wouldn’t be built until last summer.

Then, in November 2023, Musk took the stage in Austin, Texas to deliver the first 10 models of the electric pickup truck.

The Cybertruck, unlike traditional pickups, is outfitted with a stainless steel body and sharp angles designed to imitate the appearance of the Starship spaceship developed by Musk’s SpaceX. The eccentric billionaire has long been obsessed with making the Cybertruck bulletproof; famously, the pickup’s window shattered when lead designer Franz Von Holzhausen chucked a steel ball at it (Musk stands with the damaged specimen, pictured above).

“If Al Capone showed up with a Tommy gun and emptied the entire magazine into the car door, you’d stay alive,” Musk told a crowd last November. “Why did you make it bulletproof?” he then asked himself, before stating, “Why not?”