Interview with Marc Tarpenning — Co-founder of Tesla

Christoph Meyer
Mobility Entrepreneurship
7 min readApr 2, 2018


CC Image courtesy of Jonathan Chie on Flickr

Who founded Tesla? Most people would answer with the man who has become synonymous with the brand over the last ten years: Elon Musk. But before Elon, Marc Tarpenning and Martin Eberhard launched what would become one of the biggest disruptors and juggernauts of the automotive industry in the last 100 years. I had the privilege to speak with Marc and ask him about the early days, the company’s current direction, and where e-mobility is heading. My biggest takeaway from the conversation was how Tesla was still following the original roadmap while taking circuitous detours. While the company is dabbling across industries, Marc still has faith that Tesla will succeed the way it has until now: taking longer than proposed but with immense impact.

How similar/different is the direction the company is pursuing now than when you started it?
“The original business plan of January of 2004 had most of the elements that Tesla has today. We stated very clearly that we were going to be the experts on electric mobility and had already planned the Roadster. The direct sales model without franchisees was integral to our plans. The next project, the sedan, was not yet in the business plan. We didn’t know where the future was going to take us. We knew we wanted to get to much higher volumes and knew a sedan would help us get into a much larger market. However, we didn’t know how we would enter this market. There was the possibility that we would partner, like we did with Lotus for the Roadster. But we also thought we might do it alone or even go in a different direction — we couldn’t predict that.

However, there are some big developments that were definitely not in the business plan. Autonomy is one of them — we didn’t think this was possible yet in 2003/04. We also never imagined that Tesla would buy a solar installer company. And, we didn’t think we’d make cells. Our plan there was to use the best ones available. We didn’t want to be wedded to a vendor or a chemical composition — we wanted to get the best technology and best deal we possibly could. Our aim was to own the assembly — we knew we’d be able to convert the cells into safe and reliable battery packs.”

How do you see the company’s ventures beyond automotive?
“First off, as I mentioned, I never expected the company would acquire SolarCity. That deal has a lot of bizarre entanglements: how it was founded, Elon’s connection, etc. This path is definitely different than we expected.

The gigafactory was also a surprise. There were a couple of reasons why Tesla decided to build it. First, they wanted to capture additional margin. Second, they wanted to cut costs by integrating vertically. The battery really is the dominant cost of the car. I have since really warmed up to the idea — it’s about controlling your own destiny. As I see some of the big OEMs make similar moves, it gives me confidence that Tesla is on the right path.

Where this really gets interesting is storage, especially using storage at the grid scale. We’ve seen how quickly this was deployed in Australia and even in Southern California. This can have a big impact and make the grid more stable. We’ve already seen the effects — turbines are not being sold at the same rate as projected. In some sense, SolarCity is beneficial to this side of the business. It’s still an odd and even weak acquisition for me but I guess you can relate the two. Grid level storage makes a lot of sense and Tesla can dominate the space thanks to the Gigafactory.”

How will Tesla go about scaling production?
“They will flail about for the next year or so. The way Elon operates and always has, whether at SpaceX or Tesla, is that he’s always pushing very hard to do things as quickly as possible. He pushes so hard that things tend to break. That’s sort of okay in the sense that everything is hard to get right at the beginning. A lot of people said it was impossible to ramp up the Gigafactory so fast. And some of this may have turned out to be true, but they still learned a lot in the process and have pushed the automation piece very far. Maybe the Model 3 will take longer but the next model won’t have the same pain points — it will probably be behind but in the long game that’s alright.

If you look at incumbents, they pride themselves on engineering and quality. Daimler takes 10 years between the time they begin conceiving of a car and actually rolling it off the production line. That’s a strategy that doesn’t necessarily work in the 21st century. We’ve seen the car industry get complacent and things have always taken a long time for them. Maybe Tesla isn’t keeping to its own timeline but at least we have challenged the industry’s thinking. Their reasons for doing things the way they have for years no longer hold.”

How do you see the competition going forward when the large OEMs really start to ramp up their production?
“The goal of Tesla was always to change the oil equation. By Tesla’s mere existence, the OEMs have transitioned. We need all of the car companies to transition in order to get off of oil.

While these companies have started to transition, Tesla retains a big advantage: the car companies don’t have that many people focused on the electric side of the equation. They are great at marketing, building drivetrains, and assembling parts. But when it comes to electric components, even something as simple as the Engine Control Units, they have outsourced all of that. They don’t care about this. Their attitude is that real engineers work on pistons and engines, not on computers and electronics. These companies don’t have electrical engineers in the same sense we would expect. They don’t have people who can work on the electric drivetrain at scale. As a result, we see the Tier 1s investing in this a lot.

Tesla still has, by far, the most electric miles driven. The core competency of the company is having the expertise in-house. Tesla isn’t quite as good on assembly but they are learning. Eventually, the OEMs will figure the electric part out. It has taken them a long time though. Elon and the rest of the board were very worried at the beginning. We thought OEMs would respond very quickly, catch up, and then kill us. Instead, they responded by saying the Roadster didn’t work. They did the same thing with the Model S, repeating it for 3 years. The German car companies only woke up when the Model S was the best-selling luxury sedan in Germany.

What is the missing piece / catalyst for electric to really take off and take share in the transportation?
“Price is the big issue. The Model S is incredible to drive. Electric cars are just a better driving experience. Once you feel the instant acceleration, gasoline powered cars seem lame. But, it’s a $100,000 car. Rich people have tried and are switching over. But the price has to come down. The Chevy Bolt and Model 3, and to a lesser extent the Nissan Leaf, are helping with this.

The price is already coming down and will continue to do so. Bloomberg Energy predicts there will be price parity by 2025. On a per mile basis, electric vehicles are cheaper to drive. In addition, when they work well there is very little need for maintenance. The Total Cost of Ownership is already lower but we need to get the purchase price to parity. When this happens, it will be a very compelling package.”

What is your take on Tesla’s autonomous strategy?
“I find Tesla’s strategy of not using phased radar and LIDAR to be perplexing. Achieving autonomous driving is a hard enough problem already. I can understand where Elon is coming from. Humans don’t need these capabilities, so why should a vehicle? He’s ultimately right but I don’t see any downside to having better information for the vehicle. That would be one piece of the puzzle to not worry about. I would get whatever it took to eliminate this part of the problem and focus on the other things that are really hard. At some point, LIDAR will be cheap enough or cameras will get good enough for this to be solved. But, we currently have a solution. Why shouldn’t we get to the solution a bit quicker by “using a cheat”. The cost savings from avoiding LIDAR are not going to be that great…”

You started Tesla back in 2003. If you were in that position today, what company would you start / join?
“For me, the electric car space has been done now and I wouldn’t start a new electric car company at this point in time. The whole world is already turning electric. A lot of interesting things are happening: autonomous vehicles are hot, machine learning is making breakthroughs, etc. In terms of the big picture though, three areas need to be fixed: food, water, and energy. Transportation is already on its way to being fixed. Stationary storage is so interesting because it makes renewables that much more exciting. It will help us get off of fossil fuels. Urban and next-gen farming are in a similar category — enabling us to grow crops closer to where we live.

My lens would be to look at what is driving climate change — these are the areas where I could make a difference. I’m not interested in companies that are just focused on selling me more ads. Nobody has woken up in the morning hoping that Google could give them more ads in more places. Nobody wants that future. We need to start companies that build towards a world that we want to live in going forward.”

What are you most excited about in 2018 with regards to transportation?
“Seamless multi-modal transportation. I want to be able to step into the train and then step off and a driverless pod is waiting for me and knows who I am. I want to step directly into the pod and have it take me to my meeting in the central business district. In this future, there’s no wasted time and no driving around to find parking or hailing a car. I want it to be absolutely seamless.”