Tesla during Elon Musk‘s Era
This is a continuation of ‘Tesla before Elon Musk’ — find the story here — https://medium.com/@enochferanni/tesla-before-elon-musk-20a099b7e6c9
Comparing all possible scenarios, Tesla should not even make it out alive. Talk less of it being valued at over a trillion dollars today.
As we all know that for anything to work there must be a man working it.
So, who is the man working behind the scene?
Sneek peek into how Elon became CEO…
As a result of Elon Musk’s investment in the previous story that I published, Elon became the lead investor and chairman of the board of Tesla in February 2004.
The company had three business plans;
1. Develop a high-end, high-performance sports car to prove that electric vehicles are excellent and feasible.
2. Roll out a luxury sedan that would compete with high-end brands like BMW and Mercedes.
3. Produce hundreds of thousands of low-cost electric vehicles for the masses.
The founder initially led Elon Musk to believe that manufacturing the car would cost $65,000, but an internal audit revealed that the car’s cost had climbed to $140,000.
The company was losing money even before manufacturing a single car!
Elon Musk was taken aback by the situation, but he wasn’t running the company. As the lead investor and board chairman, he decided to investigate the matter himself. He visited the body panel fabrication in England and discovered that the facility didn’t have the right tools to do the job, making this another problem.
At the time of this chaos, the total funding that investors had invested in Tesla was nearly 100 million dollars, and there was no car to show for this. So, imagine how pissed the investors are going to be.
In 2007, Elon Musk converted 8 million of his preferred shares into common shares so that he could control enough votes to remove Martin Eberhard from the CEO position. These were the reasons why Martin had to step down as CEO, among other reasons.
Michael Marks, an investor and former head of Flextronics, stepped in as interim CEO. Marks had to be very proactive in fixing the issues on ground, and so he immediately drew up a list of roadblocks standing in the way of the car being;
1. Transmission not working
2. Air conditioning not working
3. Quality of seats being unreliable and much more issues.
Michael wrote in an email, “This is a lot scarier and more pressing than I thought”. Meanwhile, the media and the industry experts were talking down on Tesla, but Elon Musk wasn’t going to concede defeat primarily because of how Tesla could impact climate change.
In December 2007, Ze’ev Drori became CEO and president, replacing the interim CEO Michael Marks. In 2008, Tesla solved the production problems of the roadster, and as a result, they pushed out the roadster.
It is worthy to note that no ‘working Tesla car’ was pushed out to the street under the administration and care of Tesla founders.
Elon Musk was up to start work on the Model S. He was confident that he would be able to raise another 100 million dollars that summer to send the Model S into production, but in September 2007, the U.S. stock market crashed. The last thing in any investor’s mind was to put money into a startup car company because the odds of failure were high.
Week after week in 2008, Elon watched Tesla’s bank balance drop, and by the end of the year, Tesla barely had $500,000 left in the bank.
Elon Musk had a nervous breakdown.
Elon Musk was down to the last 20 million dollars of his fortune. He could have held onto the 20 million dollars and still be rich but, in fact, did the opposite.
The attack on Tesla from the media and industry experts was also mounting, but amidst all, Elon Musk had these plans;
1. He had to make the roadster profitable.
2. Tesla had to build battery packs for Daimler’s Smart cars.
If worked out as planned, these plans would enable Tesla to live long enough to get a loan from the government and launch the Model S.
Elon Musk was ready to put the last of his money in, but if any of those plans didn’t work out, that would be the end. During this period, Elon became the CEO of Tesla.
There’s no gain without pain. So, Elon decided to forgo the leisurely life for the moment and went through the most challenging route.
Do you still want to be like Elon?
How Elon took Tesla through Hell and survived…
Elon Musk required capital to keep Tesla moving. He persuaded most of his other investors to give emergency funds raising 40 million dollars to keep Tesla going for the main time. The company was going to have one last shot.
Elon Musk put so much of his wealth into Tesla that in 2009 he borrowed money from friends to pay for his living expenses. Elon Musk later said, “At that point, every day was like eating glass and staring into the abyss of death “.
What a pain he must have been going through!!!
The emergency funds kept Tesla alive as planned. Almost immediately, things started to unfold just as they calculated — Daimler finally felt confident enough to buy 1000 battery packs for its Smart cars in a deal worth more than 40 million Dollars from Tesla. They also agreed to buy a 10% stake in the company for 50 million dollars making Tesla’s valuation more than 500 million dollars.
In March 26, 2009, Tesla unveiled the prototype of the Model S. This impressed so many people.
In June 2009, the U.S. Department of energy, under the Obama administration, approved 465 million dollars in loan to Tesla as part of the advanced Technology vehicles manufacturing loan program.
In June 29, 2010, Tesla went public on NASDAQ. The initial public offering raised 226 million dollars for the company. This helped Tesla survive and started the Model S production, which came into the market in 2012.
On May 22, 2013, Elon Musk announced that Tesla had repaid the entire loan of 465 million dollars with over 20 million dollars in interest. That made Tesla the only American car company to have paid back its loan to the government.
Elon always keeps his hopes alive. No matter the situation, once there’s a goal that you’re aiming at, and you manage to fix your gaze on that. You’ll be fine in the end, no matter the pain.
Tesla’s Strides…
- Tesla introduced the Model X SUV, which launched in 2015.
- Tesla began deliveries of Model 3 at $35000 mass-market electric car with over 250.
- In 2017, Elon Musk released the Tesla semi-truck, designed to save at least 20,000 dollars over a million miles based on fuel cost alone.
- Tesla also unveiled a new Tesla roadster prototype that can hit 0 to 60 mph in just 1.9 seconds which is a world record. Also, you can travel from Los Angeles to San Francisco and return without recharging the battery along the way.
- Manufactured the Model 3 Sedan in 2017, which became the all-time best selling plug-in electric car worldwide.
- Tesla Unveiled the Model Y crossover in 2020.
- In June 2021, Tesla became the first electric car to sell 1million units globally.
- Tesla’s global sales were 936,222 cars in 2021, culminating in an 87% increase over the previous year.
- In October 2021, Tesla’s Market Capitalization reached 1trillion dollars, the sixth company to do so in U.S. history.
Elon Musk proved everyone wrong!
Would you prove People who have doubted you wrong??
