Where did the know-how come from?
The design and construction of a completely new car is a great challenge, but it is even more difficult to get enough money and know-how for mass production.
These realities were known to the Tesla founders. They considered that Tesla had produced an electric motor a century ago and that it seemed quite possible to develop a drive that would transfer the power of such an engine to the wheels.
The really frightening part of their project was to build the factory for the manufacture of the car and its parts. But the more the Tesla men learned about the industry, the more it became clear to them that even the big manufacturers did not actually produce their own cars themselves.
How is Tesla organized?
The days when Henry Ford had raw materials delivered to one end of his Michigan factory, and then finished cars at the other end, were long gone. "BMW no longer produced its own windshields or seat cushions or rearview mirrors," says Tarpenning. "The only thing that made the big car companies internal was the research on internal combustion engines, sales and marketing, and finishing, and we naively thought we could just use the same suppliers for our parts."
The Tesla founder's plan was to license some of the technology that AC Propulsion had developed for the tzero; as a chassis for their car they wanted to use the Lotus Elise. The British car maker, Lotus, had launched the two-door Elise 1996, and it certainly looked sleek and flat enough to please buyers of high-end cars. After talks with some people from the car dealer industry, the Tesla team decided to forego such partners and sell them directly. With these basic considerations, the three men were looking for venture capital for their project in January 2004.
In order to give investors something to touch, the founders lent a tzero of AC Propulsion and drove into Sandhill Road in Menlo Park, the venture capital mile of Silicon Valley. The car accelerated faster than a Ferrari, which caused instinctive interest among the financiers.
On the other hand, these people often lacked imagination and they did not manage to ignore the modest plastic work of the mop-up kit car. The only venture capital providers to bite were Compass Technology Partners and SD Ventures. And not even the ones were really enthusiastic.
The main partner at Compass had earned a lot of money with NuvoMedia and felt obliged to Eberhard and Tarpenning. "He said, 'It's stupid, but I invested in every automobile start-up of the past 40 years, so why not <,' says Eberhard. Still, however, Tesla needed a lead investor to raise the bulk of the 7 millions of dollars to build a so-called mule. This prototype should be the first milestone and the Company serve as a physically presentable argument for the next round of financing.
Elon Musk and Tesla
From the outset, Eberhard and Tarpenning, as the lead investor, had had Musk in the back. A few years earlier, the two had heard a speech at a Mars Society conference in Stanford where he talked about his vision of sending mice into space.
This gave them the impression that he was thinking differently than others and maybe open to the idea of an electric car. The idea of trying to win Musk as an investor for Tesla Motors became more concrete when Tom Gage of AC Propulsion telephoned Eberhard and told him that Musk is looking for financing options in the area of electric cars. One Friday, Eberhard and Wright flew to Los Angeles to meet Musk.
The weekend after, Musk Tarpenning, who had not been able to come along, poked questions about the business model. "All I remember is that I answered, answered, answered," says Tarpenning. "On Monday, Martin and I flew to him again and he said, 'Okay, I'm in.'"
More knowledge - Podcast, PDF download, eCourse or personal advice
Offline download: Download this text as PDF - Read usage rights, Because we do not automatically submit the title of this text for privacy reasons: When buying in "interests" the title register if support is needed. After buying text exclusively Download at this URL (please save).
Listen to Podcast & Download MP3: You can listen to this text for free, as member even without annoying popup, or download the MP3 for a fee - Read usage rights, After the purchase page refresh, then you will find the download link here. Because we do not automatically submit the title of this podcast for privacy reasons: When buying in "interests" the title register if support is needed.
Your eCourse on Demand: Choose your personal eCourse on this or another desired topic, As a PDF download. Up to 30 lessons with each 4 learning task + final lesson. Please enter the title under "interests". Alternatively, we are happy to put together your course for you or offer you a personal regular eMailCourse including supervision and certificate - all further information!
Consultant packages: You want to increase your reach or address applicants as an employer? For these and other topics we offer special Consultant packages (overview) - For example, a personal phone call (price is per hour).