Tesla

Tesla
Tesla (Image Source: Pexels)

Austin, Texas serves as the corporate headquarters of the American automobile and sustainable energy business Tesla, Inc. Tesla creates and produces solar panels, solar roof tiles, electric vehicles (electric cars and trucks), residential and grid-scale battery energy storage, and other associated goods and services.

With a market value of more than US$840 billion, Tesla is one of the most valuable businesses in the world and continues to be the most valuable automobile. With 21% of the battery-electric (pure electric) market and 14% of the plug-in market, the firm sold the most battery electric and plug-in electric vehicles globally in 2021.

The business creates and installs a significant amount of solar systems in the US through its subsidiary Tesla Energy. With 3.99 gigawatt-hours (GWh) of deployed battery energy storage systems in 2021, Tesla Energy is also among the biggest suppliers of such systems globally.

Martin Eberhard and Marc Tarpenning established Tesla Motors in July 2003. Nikola Tesla, an inventor, and electrical engineer is honored in the corporate name. With a $6.5 million investment in February 2004, Elon Musk rose to the position of the company’s largest shareholder. He assumed the position of CEO in 2008.

Musk claims that Tesla’s goal is to hasten the transition to environmentally friendly energy and transportation, using solar energy and electric cars as the primary sources. The Roadster sports car, which was Tesla’s first vehicle model, entered manufacturing in 2009.

The Model S sedan arrived in 2012, the Model X SUV appeared in 2015, the Model 3 sedan appeared in 2017, and the Model Y crossover appeared in 2020. The Model 3 is the plug-in electric vehicle with the highest global sales volume and, in June 2021, it became the first electric vehicle to sell one million units worldwide.

Tesla sold 936,222 vehicles globally in 2021, a growth of 87% over the previous year. As of August 2022, the company has sold a total of 3 million vehicles. Tesla became the sixth corporation in American history to have a market valuation of $1 trillion when it did so in October 2021.

Tesla Data

FormerlyTesla Motors, Inc. (July 2003 – February 2017)
OwnerElon Musk (17%)
TypePublic
IndustryAutomotive, Renewable energy
FoundedJuly 1, 2003; 19 years ago in San Carlos, California, US
FoundersSee § Founding
Headquarters13101 Tesla Road, Austin, Texas, United States
Number of locations655 retail stores/galleries and service centers (2021)
Key peopleRobyn Denholm (Chair), Elon Musk (CEO)
RevenueIncrease US$53.8 billion (2021)
Operating incomeIncrease US$6.52 billion (2021)
Net incomeIncrease US$5.52 billion (2021)
Total assetsIncrease US$62.1 billion (2021)
Total equityIncrease US$30.2 billion (2021)
Number of employeesIncrease 110,000 (April 2022)
ServicesService, Charging, Insurance, Software upgrades, Connectivity
Websitetesla.com
Tesla Data

Leadership

List of chief executives

  • Martin Eberhard (2004–2007)
  • Ze’ev Drori (2007–2008)
  • Elon Musk (since October 2008)

List of board chairs

  • Elon Musk (2004–2018)
  • Robyn Denholm (since November 2018)

Board of directors

A group of powerful Tesla investors, including the California State Teachers’ Retirement System, requested in a letter made public in April 2017 that Tesla appoint two new independent directors to its board “who do not have any relationships with chief executive Elon Musk.”

Five of the existing six non-executive directors, according to the investors, “have personal or professional links to Mr. Musk that might jeopardize their capacity to exercise independent judgment.” Brad Buss, the former CFO of SolarCity, Steve Jurvetson, a venture capitalist who now serves on the board of SpaceX, Kimbal Musk, Elon Musk’s brother, Ira Ehrenpreis, and Antonio Gracias, two investors in SpaceX, were among the directors of Tesla at the time.

The letter demanded the creation of a more impartial board to prevent groupthink. First, Musk reacted on Twitter, stating that Ford’s “governance is great” and advising the investors to “purchase stock.” He made a vow to add two independent board members two days later; Larry Ellison and Kathleen Wilson-Thompson were added at the end of 2018. In August 2022, Ellison announced his resignation, and the Board was downsized to 7 members.

Businessman Steve Westly, an executive at Daimler Herbert Kohler, and CEO and Chairman of Johnson Publishing Company Linda Johnson Rice are among other former board members.

The Board members as of September 2022:

JoinedNameTitles
2004Elon MuskCEO and product architect of Tesla; founder, CEO and CTO of SpaceX; former chairman of Tesla, Inc.; former chairman of SolarCity
2004Kimbal MuskSpaceX board member
2007Ira EhrenpreisGeneral Partner at Technology Partners
2014Robyn DenholmFull-time chair of Tesla, Inc. (since November 2018); former CFO and Head of Strategy of Telstra
2017James MurdochFormer CEO of 21st Century Fox
2018Kathleen Wilson-ThompsonGlobal head of Human Resources of Walgreens Boots Alliance
2020Hiromichi MizunoUnited Nations Special Envoy on Innovative Finance and Sustainable Investments; former executive managing director and chief investment officer of Japan’s Government Pension Investment Fund

History

Founding (2003–2004)

Martin Eberhard and Marc Tarpenning formally formed Tesla Motors, Inc. on July 1, 2003. Tarpenning was the CFO, while Eberhard was the CEO.

A few months later, Tesla hired its third employee, Ian Wright. Elon Musk, who had gained $100 million from the sale of his stake in PayPal two years prior, contributed $6.5 million of the $7.5 million series A capital that the business got in February 2004.

All five of the individuals – Eberhard, Tarpenning, Wright, Musk, and Straubel – are now able to use the title “co-founder” because of a litigation settlement reached between Eberhard and Tesla in September 2009.

Roadster (2005–2009)

Although he played a significant part in the business and carefully monitored the Roadster product design, Musk was only peripherally involved in day-to-day operations.

Musk was the driving force behind Tesla’s $13 million Series B venture capital fundraising round in February 2006, which welcomed Valor Equity Partners to the funding group.

On July 19, 2006, in Santa Monica, California, a 350-person invitation-only event was held in Barker Hangar at Santa Monica Airport to officially unveil Tesla’s first vehicle, the Roadster.

Elon Musk-led board members asked Eberhard to resign as CEO in August 2007.

Musk was only tangentially involved in day-to-day operations while having a substantial impact on the company and closely monitoring the Roadster product design.

Tesla’s $13 million Series B venture capital financing round, which included Valor Equity Partners, was driven by Musk and completed in February 2006.

A 350-person invitation-only event was held in Barker Hangar at Santa Monica Airport on July 19, 2006, to formally introduce Tesla’s first car, the Roadster.

In August 2007, a board chaired by Elon Musk requested that Eberhard step down as CEO.

In 2008, Tesla started manufacturing the Roadster.

Tesla had funded $187 million and delivered 147 vehicles by January 2009. Musk has given the business $70 million of his own money.

Tesla was given the go-ahead to take out $465 million in interest-bearing loans from the US Department of Energy in June 2009.

IPO, Model S, and Model X (2010–2015)

Tesla paid Toyota $42 million in May 2010 to buy what would eventually become the Tesla Factory in Fremont, California. The plant opened its doors in October 2010 and began producing the Model S.

Tesla stopped making the Roadster in January 2012, and in June the firm unveiled the Model S premium sedan, its follow-up vehicle. In 2012 and 2013, the Model S earned a number of vehicle honors, including the 2013 Motor Trend Car of the Year.

Tesla debuted its Tesla Powerwall (for homes) and Tesla Powerpack (for businesses) battery packs in April 2015, marking the company’s entry into the energy storage sector.

With 25,000 pre-orders, Tesla started shipping the Tesla Model X, its third vehicle, in September 2015.

SolarCity and Model 3 (2016–2018)

With the $2.6 billion all-stock acquisition of SolarCity in November 2016, Tesla joined the photovoltaics industry.

In order to more accurately represent the breadth of its growing business, which now comprised electric automobiles, battery energy storage systems, and solar power generation, Tesla Motors changed its name to Tesla, Inc. in February 2017.

The business gave $37.5 million to Nevada’s K–12 science, technology, engineering, and mathematics education in July 2018.

The Type 3 sedan, Tesla’s fourth car model, went on sale in July 2017.

Elon Musk, the CEO, briefly explored going private with Tesla in August 2018. The proposal did not come to pass and was the subject of several litigations, significant debate, and an SEC allegation of securities fraud.

Global expansion and Model Y (2019–present)

In Shanghai, China, Tesla established its first “Gigafactory” outside of the US in 2019. Built-in less than six months, Giga Shanghai was the first car plant in China that a foreign corporation entirely owned.

On January 10, 2020, Tesla broke the previous record for the greatest valuation of an American carmaker by reaching a market capitalization of $86 billion.

For the first time, Tesla posted four profitable quarters in a row from July 2019 to June 2020, qualifying it for participation in the S&P 500.

In order to advance its automation expertise, Tesla acquired a number of businesses between 2015 and 2020, including Riviera Tool, Grohmann Engineering, Perbix, Compass Automation, Hibar Systems, and German ATW Automation, as well as Maxwell Technologies and SilLion to expand its battery technology expertise.

Tesla gave the Chinese Center for Disease Control and Prevention RMB 5,000,000 ($723,000 in 2020 currency) in January 2020 to help battle the COVID-19 epidemic in mainland China.

Additionally in October 2021, Tesla’s market valuation surpassed $1 trillion, becoming the sixth business in American history to accomplish so, following the announcement that the auto rental giant Hertz had ordered 100,000 Tesla cars for its fleet.

Tesla’s new auto plant south of Berlin was officially opened on March 22, 2022, with the first customer deliveries being made by CEO Elon Musk. The largest electric vehicle assembly facility in Europe is located in Giga Berlin, a US automaker.

In an email to staff members, Musk said that he was cutting the number of paid workers by 10% since the business was “overstaffed in several areas,” but added that “hourly headcount will expand.”

Musk said that Tesla has produced more than 3 million vehicles in August 2022.

Business Tactics

When Tesla was established in 2003, electric cars were incredibly costly. Elon Musk said in 2006 that Tesla’s approach was to start making expensive, low-volume vehicles initially, such as sports cars, where buyers are less price-sensitive.

They would be able to provide cheaper and more numerous automobiles as a result of being able to gradually lower the price of batteries. Less than 2,500 of the Roadster, Tesla’s first car, were made, and it cost more than $100,000. The next versions, the Model S and Model X, are still high-end cars but are more reasonably priced.

The most recent variants, the Model 3 and the Model Y are even more affordably priced and are targeted at a market that buys more cars, with over 100,000 being sold each quarter. Contrary to almost every other automaker, Tesla regularly changes the hardware in its vehicles rather than waiting for a new model year.

Tesla does not rely on franchised auto dealerships to sell its cars, in contrast to other automakers. Instead, the business sells automobiles directly through its website and a network of outlets that are run by the business. The business sold vehicles directly to customers first among American automakers. The direct sale of automobiles to customers is outlawed in several jurisdictions, notably in the US.

Tesla has what it refers to as “galleries” at these places where it claims to “teach and enlighten customers about our products, but such venues do not actually engage in the sale of automobiles.” In all, Tesla runs close to 400 shops and galleries throughout more than 35 nations.

Instead of being close to other car dealerships, these locations are often found in malls, shopping districts, or other high-traffic areas. Since January 2022, Tesla has stopped funding direct advertising.

In 2016, estimates of Tesla’s vertical integration were put at 80%. The business manufactures parts for automobiles and also develops its own charging stations for consumers. In the automobile sector, where businesses usually outsource 80% of component production to suppliers and concentrate on engine production and final assembly, vertical integration is uncommon. Tesla adopted a low-cost plan as a business strategy so that they could sell common technological goods and grow their company into a larger market.

Tesla often gives its rivals permission to license its technology, claiming that this will assist them to hasten the global adoption of renewable energy. There are clauses in licensing agreements that prohibit the receiver from suing Tesla for patent infringement or outright copying its designs. To avoid having its technology directly copied, Tesla maintains ownership of its other intellectual property, including its trademarks and trade secrets.

Tesla Energy products

A subsidiary of Tesla Residential, commercial, and industrial clients can purchase solar energy generating systems and battery energy storage solutions from Tesla Energy. The company also offers connected goods and services.

Tesla’s current battery energy storage products segment and SolarCity, a solar energy firm it bought in 2016, were combined to form the subsidiary.

Solar panels, a system of solar shingles made specifically for Tesla by other firms, the Tesla Solar Roof, and the Tesla Solar Inverter are among the generating items offered by Tesla Energy. Other items include the Powerwall, a household energy storage system, as well as Powerpack and Megapack, two systems for massive energy storage. Additionally, Tesla Energy creates software that lets consumers manage and operate their systems.

The firm installed 345 megawatts of solar energy systems in 2021, a 68% increase over 2020, and 3.99-gigawatt hours of battery energy storage devices, a 32% increase over 2020.

Finances

Tesla said that its net income for the fiscal (and calendar) year 2021 was $5.52 billion. The yearly revenue increased by 71% over the prior fiscal year to $53.8 billion.

$314 million of the total income in 2021 comes from the sale of regulatory credits to other manufacturers in order to fulfill government emission regulations. For several quarters, that amount has been a lower proportion of income. Tesla sold $679 million in legal carbon credits in the first quarter of 2022.

Tesla had $17.6 billion in cash on hand at the end of 2021, which was $1.8 billion less than at the end of 2020.

Tesla said in February 2021 that it will soon accept Bitcoin as payment in a 10-K filing that it had invested around $1.5 billion in the cryptocurrency Bitcoin. Then, critics emphasized how bitcoin investment may conflict with Tesla’s environmental objectives. Due to the rise in the price of Bitcoin following the announcement of the investment, Tesla generated more money from the 2021 investment than it did from selling vehicles in 2020.

Tesla generated a profit for the first time outside of Bitcoin and legal credits for the quarter that ended in June 2021.

YearRevenue
(mil. USD)
Net income
(mil. USD)
Total assets
(mil. USD)
Employees
20050-128
20060-304470
20070.073-7834268
200815-8352252
2009112-56130514
2010117-154386899
2011204-2547131,417
2012413-3961,1142,914
20132,013-742,4175,859
20143,198-2945,83110,161
20154,046-8898,06813,058
20167,000-67522,66417,782
201711,759-1,96228,65537,543
201821,461-97629,74048,817
201924,578-86234,30948,016
202031,53672152,14870,757
202153,8235,51962,13199,290

Criticism

Delays

Musk has come under fire for repeatedly delaying both product manufacturing and delivery schedules. According to one count, Musk failed 20 predictions in 2016. Musk anticipated that by December, production of the Model 3 will increase to 5,000 units per week. He changed the deadline to “sometime in March” of 2018 a month later. Additionally, the Model 3’s delivery dates were pushed back. Other initiatives, including solarizing supercharger stations, have also fallen short of expectations. Late in 2018, Musk reacted: “I’m not very good at being on time, and I’ve never built a mass-produced automobile. How am I meant to know exactly when it will be finished?”

Audit of Giga New York

The Giga New York manufacturing project was the subject of an audit by the New York State Comptroller in 2020, which found several red flags, including a lack of fundamental due diligence, and that the factory itself generated just $0.54 in economic benefits for every $1 invested by the state.

The TSLAQ and short-sellers

TSLAQ is a group of short sellers and Tesla skeptics who want to “change [Tesla’s] stock” and “form [the] perception [of Tesla].” The greatest percentage of any stock on the American equities markets at the time in January 2020 was 20% of Tesla shares, which was shorted. CNN reports that by the beginning of 2021, short sellers had lost $40 billion due to the stock price’s significant increase in 2020. The Big Short character Michael Burry, a short seller, had previously shorted Tesla through his company Scion Asset Management, but he got out of that position in October 2021.

Tesla’s objective

Jamie Kitman, a writer covering the automobile industry, claims that when many CEOs of significant automakers approached Tesla for the EV technology that Musk had promised the business was prepared to contribute, they were instead given the option to purchase regulatory credits from Tesla. As a result, “the firm may not be as eager for the electric revolution to materialize as it professes,” Kitman observed.

Leave a Reply

Previous Article
Patagonia's Founder

Why is Patagonia's non-billionaire owner donating everything to a climate fund?

Next Article
Logistics

Logistics

Related Posts
SpaceX
Read More

SpaceX

Space Exploration Technologies Corp. (doing business as SpaceX) is a Hawthorne, California-based American spacecraft manufacturer, space launch provider,…