History and Financing
In 2003, two independent teams, consisting of Martin Eberhard, Marc Tarpenning and Ian Wright on the one hand, and Musk and JB Straubel on the other, both sought to commercialize the T-Zero prototype electric sports car created by AC Propulsion.
Since college, Musk's primary goal was to commercialize electric vehicles all the way to mass market, starting with a premium sports car aimed at early adopters and then moving as rapidly as possible into more mainstream vehicles, including sedans and affordable compacts.
Tom Gage, the president of AC Propulsion, suggested that the two teams join forces to maximize the chances of success. They agreed to merge their efforts, with Musk becoming chairman and overall head of product design, Eberhard becoming CEO and Straubel becoming CTO.
Musk took an active role within the company and oversaw Roadster product design at a detailed level, but was not deeply involved in the day to day business operations; Eberhard acknowledged that Musk was the person who insisted from the beginning on a carbon fiber body, and he led design of components ranging from the power electronics module to the headlamps and other styling cues.
In addition to his daily operational roles, Musk was the controlling investor in Tesla from the first financing round, funding the large majority of the Series A capital investment round of US$7.5 million with personal funds.
From the beginning, Musk consistently maintained that Tesla's long-term strategic goal was to create affordable mass market electric vehicles in order to have a material impact on oil consumption. Musk received the Global Green 2006 product design award for his design of the Tesla Roadster, presented by Mikhail Gorbachev, and he received the 2007 Index Design award for his design of the Tesla Roadster.
Musk's Series A round included Compass Technology Partners and SDL Ventures, as well as many private investors. Musk later led Tesla Motors' Series B, US$13 million, investment round which added Valor Equity Partners to the funding team. Musk co-led the third, US$40 million round in May 2006 along with Technology Partners. Tesla's third round included investment from prominent entrepreneurs including Google co-founders Sergey Brin & Larry Page, former eBay President Jeff Skoll, Hyatt heir Nick Pritzker and added the VC firms Draper Fisher Jurvetson, Capricorn Management and The Bay Area Equity Fund managed by JPMorgan Chase. The fourth round in May 2007 added another US$45 million and brought the total investments to over US$105 million through private financing.
In December 2007, Ze'ev Drori became the CEO and President of Tesla Motors. In January 2008, Tesla Motors fired several key personnel who had been involved from the inception after a performance review by the new CEO. According to Musk, Tesla was forced to reduce the company workforce by about 10 percent to lower its burn rate, which was out of control in 2007.
The fifth round in February 2008 added another US$40 million. Musk had contributed US$70 million of his own money to the company by this time. In October 2008, Musk succeeded Ze'ev Drori as CEO. Drori became Vice Chairman. He left the company in December. By January 2009, Tesla had raised US$187 million and delivered 147 cars.
On May 19, 2009, Germany's Daimler AG, maker of Mercedes, acquired an equity stake of less than 10 percent of Tesla for a reported US$50 million. In July 2009, Daimler announced that Abu Dhabi's Aabar Investments bought 40 percent of Daimler's interest in Tesla.
In June 2009 Tesla was approved to receive US$465 million in interest-bearing loans from the United States Department of Energy. The funding, part of an US$8 billion program for advanced vehicle technologies (Advanced Technology Vehicles Manufacturing Loan Program), supports engineering and production of the Model S sedan, as well as the development of powertrain technology that Tesla plans to sell to other automakers. The low-interest loans are not related to the "bailout" funds that GM and Chrysler have received, nor are they related to the 2009 economic stimulus package. The Department of Energy loan program was created in 2007 during the George Bush administration in order to get more fuel-efficient vehicle options to U.S. consumers and to decrease the country's dependence on foreign oil.
The company announced in early August 2009 that it had achieved overall corporate profitability for the month of July 2009. The company said it earned approximately US$1 million on revenue of US$20 million. Profitability arose primarily from improved gross margin on the 2010 Roadster, the second iteration of Tesla’s award-winning sports car. Tesla, which like all automakers records revenue when products are delivered, shipped a record 109 vehicles in July and reported a surge in new Roadster purchases.
In September 2009, Tesla announced an US$82.5 million round to accelerate Tesla's retail expansion in advance of the Model S. Daimler participated in the round to maintain equity ownership from its initial investment.
Tesla Motors signed a production contract on 11 July 2005 with Group Lotus to produce "gliders" (complete cars minus electric powertrain) for Tesla. Tesla Motors originally signed a production contract with Group Lotus good through March 2011, but the two automakers revealed they had extended the deal to keep the electric Roadster in production through December 2011 with a minimum number of 2,400 units, when production is unlikely to continue mostly because of tooling changes orchestrated by one of its suppliers.
Read more about this topic: Tesla Motors
Other articles related to "history and financing":
... Columbus High School first opened its doors to a class of 406 men and 431 women on 31 August 1959 following a three year fund-raising effort ... The school's primary advocate, Father A.A ...
... On June 29, 2010 Tesla Motors launched its initial public offering on NASDAQ under the symbol TSLA ... The IPO raised US$226 million for the company ...
Famous quotes containing the word history:
“The History of the world is not the theatre of happiness. Periods of happiness are blank pages in it, for they are periods of harmonyperiods when the antithesis is in abeyance.”
—Georg Wilhelm Friedrich Hegel (17701831)