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Speaker 1: Welcome to Tech Stuff, a production from iHeartRadio. He there,

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Speaker 1: and welcome to tech Stuff. I'm your host, Jonathan Strickland.

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Speaker 1: I'm an executive producer with iHeart Podcasts and How the

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Speaker 1: tech are You? So anyone who listens to this show

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Speaker 1: a lot anyway knows that I tend to dunk on

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Speaker 1: Elon Musk quite a bit. But it's okay because he

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Speaker 1: can take it. He's consistently in the running to be

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Speaker 1: the richest person in the world. Last I checked, he

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Speaker 1: was number three, behind lvmh CEO Bernard Arnault and Amazon

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Speaker 1: founder Jeff Bezos. But anyone who can count their wealth

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Speaker 1: using the designation billions is pretty well insulated from a

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Speaker 1: lowly podcaster's opinions, and I believe in punching up, ain't

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Speaker 1: much higher to go than the third richest person in

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Speaker 1: the world. Now, I would argue there are many valid

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Speaker 1: reasons to criticize Elon Musk. While I spend a lot

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Speaker 1: of time lamenting his choices over at X, you know,

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Speaker 1: the platform formerly known as Twitter. Shareholders in his electric

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Speaker 1: vehicle company Tesla have other axes to grind. So I

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Speaker 1: thought I would do an episode about the origins of

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Speaker 1: Tesla because for the first you know year, really they

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Speaker 1: didn't involve Musk at all. He was not, despite his

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Speaker 1: own designations, a co founder of Tesla, depending upon how

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Speaker 1: you want to look at it, And this might come

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Speaker 1: as a surprise to you because often either his his

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Speaker 1: fan base, or Musk himself will portray himself as kind

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Speaker 1: of like the founder of Tesla. But I'm sure a

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Speaker 1: lot of you already know that Elon Musk did not

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Speaker 1: create the company Tesla. For those who don't know that,

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Speaker 1: let's dive into the origins of this company and the

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Speaker 1: people who did create it. But first we actually need

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Speaker 1: to go back before the company existed at all and

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Speaker 1: talk about how the US state of California got the

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Speaker 1: ball rolling with some regulations. So California is a very

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Speaker 1: large state and it has a huge population, the biggest

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Speaker 1: in the United States in fact, with around thirty nine

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Speaker 1: million people. Now, lots of those people have cars, and

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Speaker 1: many of those folks have fairly long commutes to work

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Speaker 1: or to school or whatever. Plus there's all that driving

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Speaker 1: to the beach, which, as the documentary series My Crazy

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Speaker 1: ex Girlfriend tells me, takes two hours three if there's traffic.

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Speaker 1: Well in the twentieth century. All that driving was taking

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Speaker 1: a toll on the state's air quality. Right. Yeah, these

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Speaker 1: internal combustion vehicles putting out emissions and smog was a

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Speaker 1: real issue. In fact, from what I read, it wasn't

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Speaker 1: unusual in the nineteen fifties to step outside in Los

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Speaker 1: Angeles and not be able to see the tops of

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Speaker 1: some of the buildings due to air pollution. Emissions like

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Speaker 1: nitrogen oxides and hydrocarbon gas is were the chief culprit

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Speaker 1: of the visible stuff. Plus there were other gases that

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Speaker 1: were emitted by gas guzzling engines that would pose a

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Speaker 1: health risk to citizens. Now, the US as a whole

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Speaker 1: passed air quality laws, beginning in nineteen fifty five with

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Speaker 1: the Air Pollution Control Act and then in nineteen sixty

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Speaker 1: three with the Clean Air Act. But California would need

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Speaker 1: to do more to keep air pollution in check, and

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Speaker 1: so California's laws go above and beyond what the federal

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Speaker 1: regulations require. In the nineteen seventies, California state agencies began

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Speaker 1: to really take action. This was right around the time

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Speaker 1: there was also a massive oil crisis as well, something

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Speaker 1: that would drive home the need for America to develop

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Speaker 1: technologies that would either burn fuel far more efficiently or

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Speaker 1: preferably rely on some other means to power things like automobiles.

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Speaker 1: Now I'm skipping over a lot of details ranging from

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Speaker 1: global politics to matters of national security on this because

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Speaker 1: we only have so much time, and I've talked about

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Speaker 1: it in other episodes too. But anyway, when we get

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Speaker 1: up to nineteen ninety, California started to make more demanding

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Speaker 1: requirements of auto manufacturers. State regulators with the California Air

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Speaker 1: Resources Board or carb CARB passed a requirement called the

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Speaker 1: Low Emission Vehicle Regulation. The rules meant that manufacturers had

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Speaker 1: to produce light and medium duty vehicles with much lower

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Speaker 1: emissions starting in nineteen ninety four. Further, a percentage of

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Speaker 1: the vehicles that the companies produced and sold in California

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Speaker 1: would have to be zero emission vehicles. So initially, when

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Speaker 1: they first passed this in nineteen ninety, that percentage was

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Speaker 1: just two percent of all the vehicles that they sold

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Speaker 1: in the state. If manufacturers didn't comply, they wouldn't be

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Speaker 1: allowed to sell vehicles in California, though more about that

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Speaker 1: in a bit, And since California is the most populous

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Speaker 1: state in the country, and because so so many people

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Speaker 1: in California drive there, that's a market that a car

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Speaker 1: company cannot afford to lose. So companies had to figure

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Speaker 1: out a way to comply with these regulations. This brings

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Speaker 1: us to General Motors or GM. It was one of

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Speaker 1: several companies working on complying with California's demands, and in

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Speaker 1: nineteen ninety, GM showed off a prototype electric powered concept

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Speaker 1: car called the Impact. Funny name for a car like

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Speaker 1: I guess they had their reasons. I guess they were

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Speaker 1: thinking it was going to make an impact because it's

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Speaker 1: an electric vehicle sports car. But when I think of

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Speaker 1: a car and I hear the word impact, I think

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Speaker 1: things have not turned out the way you had anticipated. Anyway.

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Speaker 1: This prototype, in turn, drew inspiration from the work that

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Speaker 1: General Motors had done with other companies as part of

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Speaker 1: the World Solar Challenge. Now, as that name implies, this

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Speaker 1: challenge was a race between solar powered cars. GM collaborated

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Speaker 1: to design and build a car called the sun Racer.

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Speaker 1: Racer in this case is are a y cer because

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Speaker 1: sun rays and driver John Harvey would use this Sunracer

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Speaker 1: to win the whole ding dang derned thing. Anyway, electric

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Speaker 1: cars were nothing new in nineteen ninety In fact, they

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Speaker 1: were more than a century old at this point. In fact,

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Speaker 1: electric cars pre date gasoline powered vehicles. Making an electric

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Speaker 1: motor powerful enough to propel a vehicle wasn't really the

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Speaker 1: biggest problem. Battery technology was a really huge challenge. But anyway,

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Speaker 1: The Impact was a little two seater coup that GM

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Speaker 1: introduced at the nineteen ninety La Auto Show, kind of

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Speaker 1: as a proof of concept for a modern EV. It

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Speaker 1: used thirty two lead acid batteries for power rechargeable batteries.

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Speaker 1: The Impact would serve as inspiration for a car that

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Speaker 1: GM would actually put into mass production a few years later.

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Speaker 1: This one was called the EV one. EV of course,

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Speaker 1: stands for electric vehicle. The story of the EV one's

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Speaker 1: development and production is really interesting, but obviously I'll leave

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Speaker 1: that for a different episode because this is really more

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Speaker 1: about Tesla. So the important bit for our story is

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Speaker 1: that GM made these cars available only for lease, not

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Speaker 1: for purchase. You could not buy one, you could only

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Speaker 1: lease it, and that started in nineteen ninety six. So

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Speaker 1: while GM made a few production runs of this vehicle,

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Speaker 1: the company owned all of them the entire time. And

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Speaker 1: only leased them to folks in a few states, including

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Speaker 1: my home state of Georgia, we had some of these cars.

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Speaker 1: The EV one had a limited driving range. Reportedly, according

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Speaker 1: to some reviews I read, this was made more confusing

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Speaker 1: by the car's alert system, which would sometimes underestimate how

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Speaker 1: much further the remaining battery charge would be able to

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Speaker 1: take a driver before needing a lengthy recharge session. That's

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Speaker 1: not great if your car is telling you, hey, I'm

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Speaker 1: going to run out of juice in twenty miles, and

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Speaker 1: then fifteen miles later, it's still saying twenty miles that

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Speaker 1: just this is the source of a lot of anxiety.

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Speaker 1: I would argue, actually, that's one of the big hurdles

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Speaker 1: for EV's in general, is this anxiety about driving range.

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Speaker 1: But I read a few reviews of the EV one

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Speaker 1: experience and it sounded pretty much like what you would

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Speaker 1: expect an early modern electric vehicle with predictable limitations. It

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Speaker 1: wasn't bad necessarily, but it was the type of car

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Speaker 1: that would be suitable only for a subset of auto owners,

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Speaker 1: primarily people who would need a vehicle for commuting to

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Speaker 1: and from work and for short trips, but nothing else.

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Speaker 1: GM ended the EV one program in two thousand and one.

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Speaker 1: Presumably the company did this because it was hard to

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Speaker 1: make a profit from this particular project, and the company

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Speaker 1: viewed electric vehicles as a niche that just wouldn't provide

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Speaker 1: enough sales to justify the cost of manufacturing. But the

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Speaker 1: program inspired a couple of other entrepreneurs to launch an

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Speaker 1: upstart car company with the goal of making electric vehicles

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Speaker 1: that folks would actually be able to buy. Now, neither

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Speaker 1: of those entrepren we elon Musk. Rather, they were a

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Speaker 1: pair of engineers, one named Martin Eberhard and the other

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Speaker 1: Mark Tarpening. Now I'll start off by talking about Eberhart. First.

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Speaker 1: I absolutely love the title he has given himself on LinkedIn,

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Speaker 1: which is occasional visionary entrepreneur engineer, which is great. And

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Speaker 1: he also lists his current occupation as enjoying light. So

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Speaker 1: I would say that Eberhard is setting a heck of

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Speaker 1: an example anyway. He attended college at the University of

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Speaker 1: Illinois Urbana Champaigne, where he earned both undergraduate and graduate

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Speaker 1: degrees in electrical engineering. The first job that he lists

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Speaker 1: on LinkedIn dates to nineteen eighty three, where he served

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Speaker 1: as an engineer for a company called Weiss Technology. This

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Speaker 1: was a young company in the computer hardware space, and

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Speaker 1: while Eberhard was there, was chiefly known for the production

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Speaker 1: of computer terminals and personal computers. Eberhard worked there for

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Speaker 1: four years, then he promptly began his entrepreneurial phase. He

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Speaker 1: co founded a company called Network Computing Devices, Incorporated in

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Speaker 1: nineteen eighty seven, and a decade later he would co

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Speaker 1: found Nouveaux Media Incorporated, a company that made ebook readers.

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Speaker 1: His co founder would end up being Mark Tarpining, whom

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Speaker 1: we'll chat about more in just a moment. In an interview,

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Speaker 1: Eberhard revealed that he first got interested in making a

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Speaker 1: new electric vehicle right around the time GM stopped making them.

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Speaker 1: Several factors converged simultaneously to cause this, so, for one thing,

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Speaker 1: in nineteen ninety eight, California began to make changes to

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Speaker 1: its zero emissions vehicle requirements. The state loosened the rules

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Speaker 1: a touch and allowed car manufacturers to earn partial credits

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Speaker 1: toward these requirements by selling low emission vehicles. Eberhardt saw

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Speaker 1: this as quote unquote gutting the zero emissions rules, and

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Speaker 1: it definitely meant that companies like GM had an alternative

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Speaker 1: to producing electric or fuel cell vehicles, so instead of

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Speaker 1: building zero emission vehicles, they could focus on low emission

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Speaker 1: vehicles and meet the requirements that way. That really upset

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Speaker 1: Eberhart and would serve as the genesis for the founding

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Speaker 1: of Tesla. But before we get to that, let's turn

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Speaker 1: to the second founder, Mark Tarpaning. Tarpaning got an undergraduate

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Speaker 1: degree in computer science from the University of California, Berkeley.

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Speaker 1: He met Eberhart, though I don't know the details of

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Speaker 1: how they met, I just know that they met at

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Speaker 1: some point, and the first credit he lists on his

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Speaker 1: LinkedIn profile is essentially the co founding of Nuvo Media

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Speaker 1: with Eberhart. But before that, he worked for a company

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Speaker 1: called Textron tex Tron, As that name somewhat implies, Textron

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Speaker 1: started off as a textiles company. In fact, its original

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Speaker 1: name was the Special Yarns Corporation. These days it does

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Speaker 1: a whole lot more than just textiles, including some heavy

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Speaker 1: duty work in the aerospace and defense industries. So never

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Speaker 1: tick off anyone who knits or crochets. I think that's

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Speaker 1: the takeaway lesson I have here. Turpening's work required him

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Speaker 1: to travel to Saudi Arabia frequently, and he would often

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Speaker 1: take books with him, but he lamented how inconvenient it

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Speaker 1: was to lug those books around on his frequent travels,

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Speaker 1: and that it sure would be nice if he could just,

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Speaker 1: you know, use an e book reader instead and carry

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Speaker 1: an entire library around without having to deal with the

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Speaker 1: weight and the bulk of hard copy books. He had

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Speaker 1: already met Eberhart at this point, and the two decided

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Speaker 1: to co found Nuvo Media in order to design and

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Speaker 1: produce ebook readers. TV Guide in the form of a

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Speaker 1: subsidiary called Gemstar, would acquire Nuvau Media three years after

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Speaker 1: it was founded. Interestingly, Nuvo Media would also help inspire

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Speaker 1: the two till later co found Tesla, as did Eberhard's

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Speaker 1: personal life. So what do I mean by Eberhart's personal

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Speaker 1: life informing the founding of Tesla. Well, I'll explain that

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Speaker 1: in just a moment, but before we get to that,

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Speaker 1: let's take a quick break to thank our sponsors. Okay,

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Speaker 1: before the break, I mentioned that Eberhard was having something

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Speaker 1: happened in his personal life that would end up in

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Speaker 1: a way leading to the founding of Tesla, and that's

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Speaker 1: something was a divorce. So in an interview he said

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Speaker 1: that the divorce is kind of what prompted him to

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Speaker 1: look into getting a sports car. He says, that's what

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Speaker 1: guys do when they get a divorce, they go and

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Speaker 1: they buy a sports car. He was being a little flippant,

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Speaker 1: but tarpeting At was also in this interview and seems

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Speaker 1: to be through his facial expressions, confirming what Eberhard was saying. However,

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Speaker 1: Eberhard wanted this to be a responsible purchase, you know,

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Speaker 1: despite the fact that you could argue that it was

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Speaker 1: somewhat on a whim. He didn't want to get some

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Speaker 1: sort of gas guzzling sports car, and he said that

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Speaker 1: most of the sports cars on the market had absolutely

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Speaker 1: terrible mileage and the state of California was obviously struggling

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Speaker 1: with this infrastructure that had been deeply affected by gas

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Speaker 1: guzzling cars for decades. So he was hoping to get

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Speaker 1: something that would be a little more environmentally friendly. So

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Speaker 1: he had an interest in the EV one from GM,

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Speaker 1: but as I mentioned, GM pretty much nuked that program

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Speaker 1: from orbit. He couldn't buy an EV one. Eberhard reached

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Speaker 1: out to a much smaller almost like a boutique company

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Speaker 1: called AC Propulsion. This company, which launched in nineteen ninety two,

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Speaker 1: designed stuff like electric drive train systems for electric vehicles,

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Speaker 1: and the company had built three tiny little sports cars,

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Speaker 1: almost like an electric go kart. That's how small these

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Speaker 1: things were. They're bigger than a go kart, but not

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Speaker 1: by much. They called them the Zero t ZrO and

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Speaker 1: it made headlines and it was founded by an engineer

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Speaker 1: who had actually worked on GM's EV one back in

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Speaker 1: the day. Eberhard was hoping that AC Propulsion would move

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Speaker 1: the Zero vehicle into production, because again they had only

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Speaker 1: ever built three of these things, but AC Propulsion turned

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Speaker 1: him down. Instead, the company opted to focus on more

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Speaker 1: practical vehicles, not sports cars. One issue that Eberhard noted

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Speaker 1: was that the Zero was relying on older battery technology

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Speaker 1: like the Impact of nineteen ninety That Zero was using

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Speaker 1: lead acid batteries. At Nuvau Media, Eberhard and Tarpening initially

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Speaker 1: used nickel metal hydride batteries for the first generation of

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Speaker 1: their e readers, but then they switched to lithium ion

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Speaker 1: batteries for the second generation, and Eberhard suspected that lithium

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Speaker 1: ion battery technology could be a more viable future for

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Speaker 1: electric vehicles. So he and Tarpening discussed the idea and

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Speaker 1: ultimately this is what would lead them to cofound Tesla

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Speaker 1: Motors around two thousand and two two thousand and three.

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Speaker 1: Now this was a pretty big decision. Tarpaning felt confident

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Speaker 1: that they would be able to make a coumpmpany that

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Speaker 1: could solve the issues of designing the computer and electronic

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Speaker 1: systems that would actually provide propulsion. Essentially, he said that

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Speaker 1: he was pretty sure a Silicon Valleys startup company could

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Speaker 1: make the stuff that would make an electric vehicle go

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Speaker 1: that that part wouldn't be the hard part. He was

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Speaker 1: far less certain about the ability to make a car

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Speaker 1: that would actually go around all these components, like the

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Speaker 1: actual car thing, the chassis, the body of the car,

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Speaker 1: all of that. That was the part where he was like,

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Speaker 1: I don't know if we can do the mechanical systems.

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Speaker 1: We can definitely do the electronic ones and computer systems,

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Speaker 1: but I don't know about the mechanical ones. So how

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Speaker 1: do you go about convincing investors to put money in

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Speaker 1: your idea when you have no record, nothing to point

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Speaker 1: at to say we know how to make vehicles. You

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Speaker 1: might say, hey, we know how to make computer systems

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Speaker 1: and we know how to work with batteries and stuff,

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Speaker 1: but if you can't point to cars, that's kind of

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Speaker 1: a non starter. There's gonna be a lot of car

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Speaker 1: puns in this episode. And I swear as I was

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Speaker 1: writing it, I was like, this is a car pun

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Speaker 1: and I didn't even intend it. I just left them in. Anyway,

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Speaker 1: our two protagonists would need to secure funding for their

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Speaker 1: fledgling company, and that meant they had to seek out investors,

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Speaker 1: and that involved a lot of conversations with movers and

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Speaker 1: shakers and walk in wallets, and around this time they

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Speaker 1: hired employee number three. Employee number three was a guy

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Speaker 1: named Ian Wright, not the British soccer player Ian Wright,

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Speaker 1: but rather an engineer who had worked as a director

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Speaker 1: for Cisco Systems as well as a CTO for all

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Speaker 1: Tomar Networks, among other things. And one early decision for

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Speaker 1: Eberhart and company was the type of vehicle that they

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Speaker 1: wanted to focus on first. So the idea to make

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Speaker 1: that ev sports car that Eberhart had wanted in the

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Speaker 1: first place kind of became the driving force for Tesla. Again.

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Speaker 1: More unintentional Hart puns not to satisfy Eberhart's desire to

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Speaker 1: have another sports car. That's not the reason why they

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Speaker 1: wanted to go this way, or at least not the

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Speaker 1: main one. Instead, it was because the founders felt that

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Speaker 1: a sports car would attract early adopters, people with deep

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Speaker 1: pockets who wanted something cool like an electric vehicle sports car.

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Speaker 1: They knew that the first Tesla vehicles were going to

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Speaker 1: be expensive. That was going to be a given. It's

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Speaker 1: just it was going to be expensive to make them,

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Speaker 1: and so they'd have to be expensive to purchase. A

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Speaker 1: company couldn't exist otherwise. Hardware often brand new hardware typically

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Speaker 1: is really expensive, like consumer hardware if you were around

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Speaker 1: whenever any new technology launched, like Apple Vision Pro is

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Speaker 1: a pretty good one. I mean, there are other mixed

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Speaker 1: reality headsets out there, but Apple's Vision Pro headsets are

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Speaker 1: thirty five hundred dollars to start off. They get more

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Speaker 1: expensive from there. That's largely because of all the money

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Speaker 1: that went into R and D and manufacturing companies want

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Speaker 1: to recapture that stuff. And it's only after a new

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Speaker 1: technology reaches a certain level of a adoption that a

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Speaker 1: company can switch into sort of a mass production mode

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Speaker 1: and bring the costs of manufacturing down, which in turn

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Speaker 1: can bring the cost of a product down. But at

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Speaker 1: the beginning, it's going to be expensive, So putting out

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Speaker 1: a sensible hatchback electric vehicle probably wasn't going to cut it.

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Speaker 1: No one would be willing to pay what it was

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Speaker 1: going to cost. So the team committed to designing and

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Speaker 1: producing a sports car, and they decided ultimately they would

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Speaker 1: call it the Tesla Roadster. Now that whole process would

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Speaker 1: take five years. The team had a full car to

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Speaker 1: design in that five years, and Eberhard and Tarpeening would

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Speaker 1: start off by attending an La auto show and they

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Speaker 1: met with representatives from Lotus. So Lotus is a car

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Speaker 1: company in England. It traces its history back to nineteen

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Speaker 1: fifty two. And the Tesla engineers had discovered that it's

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Speaker 1: not unusual in auto manufacturing to outsource a lot of

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Speaker 1: the stuff that you use to build your cars. You know,

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Speaker 1: that might be things like latches or safety equipment, or

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Speaker 1: all sorts of different things, and it meant that they

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Speaker 1: didn't have to make everything themselves. But they didn't really

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Speaker 1: know how to go about creating those relationships with suppliers,

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Speaker 1: and so they figured, we'll go to the LA Auto Show.

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Speaker 1: We'll see if we can meet with some of the

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Speaker 1: representatives from the various car companies and see if we

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Speaker 1: can start to form a relationship that will help us

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Speaker 1: in our path to making this sports car. So again

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Speaker 1: they met with these folks from Lotus and they kind

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Speaker 1: of gave an early pitch of what they were trying

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Speaker 1: to do to the company. You know, they're like, well,

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Speaker 1: why should we reinvent the wheel when we can work

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Speaker 1: with a company like Lotus that has already done all this. Plus,

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Speaker 1: you know a roadster has to have like four wheels.

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Speaker 1: That's way too much inventing. So, according to Tarpaning and Eberhard,

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Speaker 1: the folks at Lotus said that the pitch was interesting,

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Speaker 1: but they should all have a full meeting about this

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Speaker 1: back in England to discuss things further back at Lotus's headquarters.

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Speaker 1: Tarpaning cleverly pointed out that this is a great way

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Speaker 1: for Lotus to make sure that the pair were actually

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Speaker 1: serious about their business venture, because flying to another country

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Speaker 1: in order to have a sales pitch meeting, that's a

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Speaker 1: big request and a lot of startup folks would potentially

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Speaker 1: bulk at that, but by showing up to actually follow

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Speaker 1: through on a pitch, that showed that Eberhard and Tarpaning

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Speaker 1: were committed to this idea. So they went to England

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Speaker 1: and the reps from Lotus said that if the team

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Speaker 1: could secure sufficient funding, Lotus might partner with them to

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Speaker 1: help with the process of building out an actual vehicle.

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Speaker 1: This gave Tesla an early advantage because it meant that

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Speaker 1: they could go to potential investors, they could lay out

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Speaker 1: their plan and they could even indicate that Lotus was

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Speaker 1: a potential partner for them, and that could help build

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Speaker 1: confidence in the company and the project and to more

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Speaker 1: investors to actually pour some serious money into the operation.

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Speaker 1: They could say, yeah, we don't know anything about building

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Speaker 1: a car. We know how to build all the electronic systems,

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Speaker 1: but our partner is Lotus, and that's a car company

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Speaker 1: with more than half a century's worth of experience in

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Speaker 1: this space. So that was a big help. When they

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Speaker 1: walked into different boardrooms with venture captalysts and were making

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Speaker 1: their pitches, well, one of those early conversations was with

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Speaker 1: Elon Musk, and Elon Musk was already into his own

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Speaker 1: entrepreneurial phase where he was using his already considerable wealth

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Speaker 1: to get involved in a lot of different things, and

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Speaker 1: he got excited about this idea from Eberhart and Tarpaning.

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Speaker 1: And in fact, this was not their first meeting with Musk.

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Speaker 1: They had actually met him several years earlier. They were

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Speaker 1: founding members of the Mars Society, which is a nonprofit

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Speaker 1: organization that advocates for human astronauts to go to Mars.

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Speaker 1: Dusk obviously has a very deep interest in this as well,

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Speaker 1: and years before he would go on to found SpaceX,

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Speaker 1: Musk attended a conference by the Mars Society, and Eberhard

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Speaker 1: and Tarpening attended that conference and they went to the talk,

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Speaker 1: and after the talk they approached Musk and they talked

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Speaker 1: to him for a while. But this was not the

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Speaker 1: point where they got him on board as an investor

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Speaker 1: for Tesla. They did meet with him again once they

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Speaker 1: encountered some other issues with potential investors. They kept running

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Speaker 1: into issues where folks just wouldn't commit, and it was

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Speaker 1: growing very frustrating. Meanwhile, AC Propulsion, that company I talked

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Speaker 1: about earlier that made the relatively small electric sports card

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Speaker 1: the zero. They had been trying to court Musk, but

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Speaker 1: they gave up on their efforts. The two parties just

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Speaker 1: didn't see eye to eye on anything. But this gave

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Speaker 1: Eberhard and Tarpening the oppertunity to reach out to Musk instead,

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Speaker 1: And at this point, Musk was just around founding SpaceX,

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Speaker 1: and so he invited the pair of Tesla engineers to

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Speaker 1: his startup HQ. Tarpining then said in an interview that

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Speaker 1: pitching to Musk was very different from other venture capitalists

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Speaker 1: because most of the folks that they had encountered had

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Speaker 1: said that their concept for an electric sports car was

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Speaker 1: just bonkers, that it would never work. They couldn't even

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Speaker 1: see how you could build it, So they would get

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Speaker 1: shut out of a lot of those venture capitalists conversations

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Speaker 1: pretty early. But Elon Musk was in the middle of

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Speaker 1: launching a startup that was dedicating its efforts toward the

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Speaker 1: space industry. And for a startup to be going into

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Speaker 1: like creating private space craft, that's such an audacious goal,

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Speaker 1: it's such a hard thing to do that, by comparison,

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Speaker 1: a company trying to make an electric sports car seemed

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Speaker 1: absolutely mundane. So Elon Musk is like, well, of course

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Speaker 1: he can do that. I'm trying to go to so

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Speaker 1: building an electric car that doesn't seem like that's that

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Speaker 1: big a deal. So the two told Musk that their

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Speaker 1: plan was to use the sports car as a way

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Speaker 1: to convince people that electric vehicles don't need to be tiny,

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Speaker 1: they don't need to be ugly. They could be stylish

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Speaker 1: and sexy and fast and impressive, as well as practical

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Speaker 1: and environmentally friendly, and that this would give Tesla the

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Speaker 1: momentum to follow a roadmap that would involve introducing other

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Speaker 1: types of cars, including ones more practical for families and such.

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Speaker 1: So in April two thousand and four, Musk initially contributed

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Speaker 1: around six and a half million dollars of his own

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Speaker 1: money as an investment into Tesla in its series A

432
00:25:41,440 --> 00:25:45,040
Speaker 1: round of funding. Now, I've done episodes about funding rounds before,

433
00:25:45,119 --> 00:25:49,719
Speaker 1: but generally speaking, you typically have seed investments early on.

434
00:25:50,080 --> 00:25:53,000
Speaker 1: This is just to get things even moving at all,

435
00:25:53,320 --> 00:25:57,440
Speaker 1: and then you have rounds of fundraising where you get

436
00:25:57,440 --> 00:26:01,560
Speaker 1: investors to put money into a project, and a company

437
00:26:01,640 --> 00:26:04,280
Speaker 1: might have several of these before it ever has any

438
00:26:04,320 --> 00:26:09,000
Speaker 1: other means of generating revenue. Like that's not revenue obviously,

439
00:26:09,000 --> 00:26:11,919
Speaker 1: but generating money so that they can operate because obviously

440
00:26:12,000 --> 00:26:13,919
Speaker 1: otherwise you would just run out of cash and the

441
00:26:13,920 --> 00:26:18,560
Speaker 1: whole thing would go bankrupt. So Musk's contribution was the

442
00:26:18,760 --> 00:26:22,840
Speaker 1: vast majority of the first round of investment, and it

443
00:26:22,960 --> 00:26:26,520
Speaker 1: was around another million dollars provided by other investors, but

444
00:26:26,760 --> 00:26:30,679
Speaker 1: the primary investor was Musk. So Elon Musk became the

445
00:26:30,760 --> 00:26:34,080
Speaker 1: chairman of the board of directors for Tesla. Martin Eberhard

446
00:26:34,320 --> 00:26:38,520
Speaker 1: was named CEO of the company, and the engineers got

447
00:26:38,520 --> 00:26:43,720
Speaker 1: to work designing the roadsters systems. Now, as they would

448
00:26:43,720 --> 00:26:47,719
Speaker 1: say in later interviews, everything was difficult. They had to

449
00:26:47,760 --> 00:26:51,440
Speaker 1: invent all the computer and electronic systems from scratch. There

450
00:26:51,600 --> 00:26:55,200
Speaker 1: was no model to follow. They had done some rough

451
00:26:55,320 --> 00:27:01,000
Speaker 1: estimations and concluded that they should be able to actually

452
00:27:01,040 --> 00:27:04,879
Speaker 1: do what they wanted to do from a purely technical standpoint, like,

453
00:27:05,400 --> 00:27:08,800
Speaker 1: the amount of electricity they could generate using the battery

454
00:27:08,920 --> 00:27:12,520
Speaker 1: packs should be sufficient for running the car. The battery

455
00:27:12,560 --> 00:27:16,439
Speaker 1: packs shouldn't be too large or heavy or bulky to

456
00:27:17,040 --> 00:27:19,880
Speaker 1: impact the design or operation of the vehicle. Right. They

457
00:27:19,880 --> 00:27:23,520
Speaker 1: did all the math to make sure that the approach

458
00:27:23,560 --> 00:27:27,040
Speaker 1: they were going to take was a practical one, but

459
00:27:27,200 --> 00:27:32,960
Speaker 1: that was just math and hypotheticals like actually making the

460
00:27:33,000 --> 00:27:36,439
Speaker 1: physical things. That's got its own set of challenges. So

461
00:27:36,520 --> 00:27:38,880
Speaker 1: to bring their concept to life would take many hours,

462
00:27:38,920 --> 00:27:42,399
Speaker 1: in fact, years of hard work. Okay, we're going to

463
00:27:42,480 --> 00:27:45,160
Speaker 1: take another quick break. When we come back, i'll talk

464
00:27:45,240 --> 00:27:58,359
Speaker 1: more about the early years at Tesla. We're back. So

465
00:27:58,480 --> 00:28:02,960
Speaker 1: while the engineers are actually working on figuring out the

466
00:28:03,040 --> 00:28:07,520
Speaker 1: systems for Tesla, Musk was helping in the efforts to

467
00:28:07,520 --> 00:28:11,199
Speaker 1: secure more rounds of funding. Ultimately he would raise more

468
00:28:11,200 --> 00:28:14,720
Speaker 1: than one hundred million dollars in multiple rounds. In those

469
00:28:14,760 --> 00:28:19,800
Speaker 1: early years, Musk himself contributed millions more dollars in investments,

470
00:28:19,840 --> 00:28:21,880
Speaker 1: like when one of his other investments would pay off,

471
00:28:21,880 --> 00:28:25,199
Speaker 1: he would invest some of that back into Tesla. So

472
00:28:25,240 --> 00:28:28,240
Speaker 1: the already wealthy Musk was securing a growing amount of

473
00:28:28,240 --> 00:28:32,359
Speaker 1: equity in Tesla and that would seriously pay off down

474
00:28:32,400 --> 00:28:36,119
Speaker 1: the road, so to speak. So one early technical challenge

475
00:28:36,240 --> 00:28:38,960
Speaker 1: that the engineers faced had to do with battery safety.

476
00:28:39,320 --> 00:28:42,480
Speaker 1: This was not something that they had anticipated, but in

477
00:28:42,520 --> 00:28:46,480
Speaker 1: the mid two thousands, in that first decade, lithium ion

478
00:28:46,560 --> 00:28:48,640
Speaker 1: batteries were starting to make the news due to some

479
00:28:48,720 --> 00:28:54,720
Speaker 1: spectacular and dangerous failures involving Dell laptops. There were stories

480
00:28:54,800 --> 00:28:59,920
Speaker 1: of Dell laptop batteries failing and then entering into thermal runaway.

481
00:29:00,280 --> 00:29:02,840
Speaker 1: That's where a battery begins to overheat and the cycle

482
00:29:02,880 --> 00:29:06,760
Speaker 1: perpetuates itself, which leads to battery failure, and this can

483
00:29:06,800 --> 00:29:11,080
Speaker 1: include combustion or even explosions. So this convinced the Tesla

484
00:29:11,080 --> 00:29:13,800
Speaker 1: team that they needed to test their own lithium ion

485
00:29:13,920 --> 00:29:18,960
Speaker 1: battery cells for thermal runaway. So a battery pack consists

486
00:29:19,040 --> 00:29:23,480
Speaker 1: of many battery cells, right, and they wanted to see

487
00:29:23,880 --> 00:29:29,160
Speaker 1: what would happen if they forced their battery cells into

488
00:29:29,400 --> 00:29:33,560
Speaker 1: a thermal runaway situation. And the way they did this

489
00:29:33,720 --> 00:29:36,480
Speaker 1: was a very diy approach and also what I would

490
00:29:36,520 --> 00:29:39,840
Speaker 1: probably call an error in judgment. So they went to

491
00:29:39,920 --> 00:29:44,560
Speaker 1: Eberhard's house, They dug a hole, they put a battery

492
00:29:44,600 --> 00:29:47,920
Speaker 1: cell in the hole, They weighed down the battery cell

493
00:29:47,960 --> 00:29:51,360
Speaker 1: with various stuff, and then they pumped enough juice into

494
00:29:51,400 --> 00:29:54,080
Speaker 1: the battery to force it into thermal runaway. And the

495
00:29:54,120 --> 00:29:57,240
Speaker 1: results were apparently very impressive, not in a good way,

496
00:29:57,360 --> 00:29:59,960
Speaker 1: but in a scary way. However, it did set the

497
00:30:00,080 --> 00:30:02,400
Speaker 1: team on a journey to find out how to design

498
00:30:02,520 --> 00:30:04,760
Speaker 1: the battery cells for the Tesla in such a way

499
00:30:04,760 --> 00:30:09,160
Speaker 1: that should one cell experience thermal runaway, that would not

500
00:30:09,400 --> 00:30:13,560
Speaker 1: then spread to adjoining battery cells. And thus this way

501
00:30:13,640 --> 00:30:17,560
Speaker 1: it could limit the danger of a cell failing it

502
00:30:17,560 --> 00:30:20,080
Speaker 1: would still be dangerous, but not as dangerous as having,

503
00:30:20,360 --> 00:30:23,920
Speaker 1: you know, an entire array of battery cells that are

504
00:30:24,200 --> 00:30:28,160
Speaker 1: arranged in a giant battery pack suddenly going nuclear on you.

505
00:30:28,440 --> 00:30:32,160
Speaker 1: That would be really bad news. So they got to

506
00:30:32,240 --> 00:30:35,200
Speaker 1: work fixing that, and you know, they found engineering ways

507
00:30:35,240 --> 00:30:38,720
Speaker 1: to mitigate the risk, and the team had tons of

508
00:30:38,720 --> 00:30:42,880
Speaker 1: different tasks like this. Everything about designing the Tesla Roadster

509
00:30:43,160 --> 00:30:46,520
Speaker 1: kind of followed that path where they would say, oh,

510
00:30:46,680 --> 00:30:49,560
Speaker 1: the approach we wanted to take, it turns out this

511
00:30:49,640 --> 00:30:53,320
Speaker 1: is not totally reliable. Like sometimes when we build a

512
00:30:53,360 --> 00:30:57,239
Speaker 1: battery pack, the connections don't all work, which means that

513
00:30:57,320 --> 00:31:01,120
Speaker 1: you can't rely on this particular approach for manufacturing, which

514
00:31:01,120 --> 00:31:04,040
Speaker 1: means we can't do that right because if one out

515
00:31:04,080 --> 00:31:07,200
Speaker 1: of every four or five of your battery packs doesn't

516
00:31:07,240 --> 00:31:12,400
Speaker 1: work because the welding contacts aren't right, that's a deal breaker.

517
00:31:12,600 --> 00:31:15,680
Speaker 1: So they had to keep innovating and finding new ways

518
00:31:15,720 --> 00:31:18,880
Speaker 1: to do things in order to make a system that

519
00:31:19,080 --> 00:31:22,120
Speaker 1: was actually workable. So beyond all that, they had to

520
00:31:22,120 --> 00:31:25,000
Speaker 1: figure out how to cool the system down, they needed

521
00:31:25,040 --> 00:31:27,520
Speaker 1: to be able to insulate it. Not just cool it down,

522
00:31:27,520 --> 00:31:30,280
Speaker 1: but also insulate it because electric batteries can take a

523
00:31:30,280 --> 00:31:33,320
Speaker 1: really long time to ramp up in colder temperatures, and

524
00:31:33,360 --> 00:31:35,760
Speaker 1: presumably at least some of the folks who wanted an

525
00:31:35,800 --> 00:31:38,120
Speaker 1: electric sports car would be driving them in places that

526
00:31:38,160 --> 00:31:40,880
Speaker 1: could get a bit more chilly than central California, so

527
00:31:41,080 --> 00:31:43,440
Speaker 1: they needed to figure that stuff out too, And the

528
00:31:43,480 --> 00:31:46,440
Speaker 1: work that Tesla engineers did in battery technology would go

529
00:31:46,480 --> 00:31:49,360
Speaker 1: on to become essentially the standard for much of the

530
00:31:49,400 --> 00:31:52,480
Speaker 1: automotive industry that was working in evs later on. The

531
00:31:52,520 --> 00:31:57,720
Speaker 1: pioneers at Tesla created dependable, replicable methodologies when none existed before.

532
00:31:58,080 --> 00:32:00,240
Speaker 1: The company was hard at work for the first few

533
00:32:00,280 --> 00:32:03,400
Speaker 1: years just ironing out all these technical challenges. On top

534
00:32:03,440 --> 00:32:07,520
Speaker 1: of that, they faced issues with suppliers for stuff that

535
00:32:07,720 --> 00:32:10,520
Speaker 1: was pretty mundane. It turned out a lot of suppliers

536
00:32:10,600 --> 00:32:13,080
Speaker 1: were skeptical about Tesla, and a lot of them were

537
00:32:13,120 --> 00:32:16,240
Speaker 1: reluctant to do business with this startup. But a car

538
00:32:16,400 --> 00:32:19,760
Speaker 1: needs certain things like seat belts and airbags and other

539
00:32:19,880 --> 00:32:24,760
Speaker 1: standardized equipment that has to meet governmental regulations. So smoothing

540
00:32:24,800 --> 00:32:27,760
Speaker 1: out those relationships with suppliers and getting buy in from

541
00:32:27,800 --> 00:32:30,680
Speaker 1: them took a lot of early work as well. That

542
00:32:30,760 --> 00:32:33,640
Speaker 1: work was starting to pay off, however. In two thousand

543
00:32:33,680 --> 00:32:36,640
Speaker 1: and six, Tesla had a prototype vehicle that they could

544
00:32:36,640 --> 00:32:39,200
Speaker 1: actually show off. So it was still a couple of

545
00:32:39,320 --> 00:32:43,280
Speaker 1: years out from actual production, but this would help establish

546
00:32:43,280 --> 00:32:47,320
Speaker 1: Tesla as a serious brand. They officially unveiled the Tesla

547
00:32:47,400 --> 00:32:52,560
Speaker 1: Roadster at a fairly exclusive event in Santa Monica, California,

548
00:32:52,560 --> 00:32:55,760
Speaker 1: on July nineteenth, two thousand and six. The company was

549
00:32:55,800 --> 00:32:58,080
Speaker 1: still kind of in stealth mode at this point, so

550
00:32:58,440 --> 00:33:02,560
Speaker 1: this wasn't like a huge, huge media splash, but it

551
00:33:02,640 --> 00:33:05,280
Speaker 1: was important for Tesla to get this in front of

552
00:33:05,320 --> 00:33:08,600
Speaker 1: investors and potential investors. So one thing that Tesla did

553
00:33:08,920 --> 00:33:11,200
Speaker 1: that was a little bit unusual is that it began

554
00:33:11,280 --> 00:33:15,080
Speaker 1: to take pre orders for the Tesla Roadster. Now, this

555
00:33:15,280 --> 00:33:18,040
Speaker 1: was a new idea in the auto industry. Tesla invited

556
00:33:18,080 --> 00:33:20,920
Speaker 1: people of means, people who could afford to do this,

557
00:33:21,280 --> 00:33:24,840
Speaker 1: to join what they called the Tesla Roadster Club. This

558
00:33:25,040 --> 00:33:27,560
Speaker 1: was a club that had a hefty membership fee. Essentially,

559
00:33:27,560 --> 00:33:31,200
Speaker 1: it was a waiting list, so premium buyers, those who

560
00:33:31,200 --> 00:33:33,520
Speaker 1: wanted to roadster as quickly as they could get one,

561
00:33:33,800 --> 00:33:37,520
Speaker 1: would have to PLoP down fifty thousand dollars for a

562
00:33:37,560 --> 00:33:43,240
Speaker 1: membership into this club. The patient buyers could dedicate thirty

563
00:33:43,440 --> 00:33:46,960
Speaker 1: grand to becoming a member that would still guarantee them

564
00:33:47,080 --> 00:33:50,000
Speaker 1: the ability to buy a roadster, but only after all

565
00:33:50,040 --> 00:33:53,880
Speaker 1: the premium buyers got theirs first. Tesla said the membership

566
00:33:53,880 --> 00:33:56,800
Speaker 1: fee was fully refundable and that members would get their

567
00:33:56,840 --> 00:34:01,040
Speaker 1: money back the quote day that you confirm your option selections,

568
00:34:01,080 --> 00:34:03,360
Speaker 1: which is three months prior to the production of your

569
00:34:03,480 --> 00:34:07,120
Speaker 1: Tesla Roadster end quote. So essentially this was just a

570
00:34:07,160 --> 00:34:10,319
Speaker 1: reserve on a car. This actually grew out of a

571
00:34:10,360 --> 00:34:12,799
Speaker 1: trend that the team had already noticed amongst some of

572
00:34:12,800 --> 00:34:16,520
Speaker 1: their investors, because some of those folks were calling up

573
00:34:16,560 --> 00:34:20,240
Speaker 1: Tesla and asking to pre pay for a Tesla Roadster

574
00:34:20,480 --> 00:34:22,359
Speaker 1: so that they would get one as soon as they

575
00:34:22,360 --> 00:34:25,720
Speaker 1: were available. The price tag was right around one hundred

576
00:34:25,800 --> 00:34:28,839
Speaker 1: thousand dollars, like it all depended on the options you got,

577
00:34:28,880 --> 00:34:31,520
Speaker 1: but you're talking like one hundred grand. That is a

578
00:34:31,560 --> 00:34:34,880
Speaker 1: lot of money to just PLoP down with Tesla to

579
00:34:34,960 --> 00:34:38,000
Speaker 1: put down on a car that doesn't even really exist yet,

580
00:34:38,080 --> 00:34:40,880
Speaker 1: not as a production model anyway, and yet some investors

581
00:34:40,880 --> 00:34:44,960
Speaker 1: were doing this. This necessitated making a list of pre orders,

582
00:34:45,120 --> 00:34:48,160
Speaker 1: and people got very interested on where on that list

583
00:34:48,200 --> 00:34:52,120
Speaker 1: they fell. Became kind of a status thing with Elon Musk, right,

584
00:34:52,160 --> 00:34:54,239
Speaker 1: they're at the very tippy top. But it was clear

585
00:34:54,280 --> 00:34:57,360
Speaker 1: that folks were really getting excited about the Tesla Roadster,

586
00:34:57,560 --> 00:35:00,560
Speaker 1: and even though it was going to be monstrously exc expensive,

587
00:35:00,800 --> 00:35:03,680
Speaker 1: there was a market for this vehicle. Might have been

588
00:35:03,680 --> 00:35:06,399
Speaker 1: a small market, but it was there. So those were

589
00:35:06,880 --> 00:35:10,200
Speaker 1: nice indicators for the company. But behind the scenes, things

590
00:35:10,239 --> 00:35:13,319
Speaker 1: weren't all on a positive trajectory. For one thing, the

591
00:35:13,360 --> 00:35:17,200
Speaker 1: development cycle for the Roadster was taking longer than initially anticipated.

592
00:35:17,360 --> 00:35:20,640
Speaker 1: Things were going past deadline, things were going way over budget,

593
00:35:20,760 --> 00:35:23,759
Speaker 1: and since this was a privately funded company, it meant

594
00:35:23,800 --> 00:35:27,880
Speaker 1: that Tesla was burning through investor dollars pretty quickly. Elon

595
00:35:28,000 --> 00:35:30,960
Speaker 1: Musk was getting a little bit upset about all this,

596
00:35:31,360 --> 00:35:33,400
Speaker 1: and there are a lot of different takes on what

597
00:35:33,560 --> 00:35:37,160
Speaker 1: would follow. So I'm trying to be objective as I

598
00:35:37,239 --> 00:35:40,080
Speaker 1: can and to stick with the facts as I understand them.

599
00:35:40,400 --> 00:35:42,080
Speaker 1: But you should know that what I'm going to say

600
00:35:42,120 --> 00:35:45,440
Speaker 1: next like, there are multiple variations of this story and

601
00:35:45,480 --> 00:35:48,200
Speaker 1: how it unfolded, and I honestly don't know what the

602
00:35:48,239 --> 00:35:51,480
Speaker 1: full truth is. But Elon Musk, as chairman of the board,

603
00:35:51,800 --> 00:35:55,040
Speaker 1: apparently met with other board members, some of whom had

604
00:35:55,160 --> 00:35:59,560
Speaker 1: just joined Tesla because of, you know, early investments into

605
00:35:59,560 --> 00:36:03,840
Speaker 1: the company, and they decided that Eberhard wasn't cutting out

606
00:36:04,320 --> 00:36:09,799
Speaker 1: as the CEO, and so Musk essentially fires Eberhard tells

607
00:36:09,840 --> 00:36:13,040
Speaker 1: him to step down as CEO. Technically, Eberhard was given

608
00:36:13,080 --> 00:36:15,759
Speaker 1: a different position within the company, but as he would

609
00:36:15,840 --> 00:36:18,680
Speaker 1: later say, he felt he had been quote unquote voted

610
00:36:18,719 --> 00:36:22,000
Speaker 1: off the island, and so in two thousand and seven, Eberhard,

611
00:36:22,280 --> 00:36:24,920
Speaker 1: one of the co founders of the company, leaves Tesla.

612
00:36:25,320 --> 00:36:30,719
Speaker 1: Initially an investor named Michael Marx was named as interim CEO. Now,

613
00:36:30,760 --> 00:36:34,040
Speaker 1: whether or not he was interim CEO from the get

614
00:36:34,080 --> 00:36:36,640
Speaker 1: go or that was something they called him after the fact,

615
00:36:36,800 --> 00:36:39,719
Speaker 1: that's something that some sources dispute. Most of them, though,

616
00:36:40,000 --> 00:36:42,439
Speaker 1: just referred to him as an interim CEO. He would

617
00:36:42,480 --> 00:36:45,160
Speaker 1: serve as CEO of Tesla for a little less than

618
00:36:45,200 --> 00:36:48,880
Speaker 1: a year, and Musk would then replace him with an

619
00:36:48,960 --> 00:36:53,520
Speaker 1: Israeli American entrepreneur named Zev dry So. Drory had worked

620
00:36:53,520 --> 00:36:59,200
Speaker 1: at IBM in their semiconductor division back in the nineteen sixties.

621
00:36:59,239 --> 00:37:02,600
Speaker 1: He then left to work at Fairchild Semiconductor. Then he

622
00:37:02,680 --> 00:37:07,319
Speaker 1: left that in nineteen seventy to build his own semiconductor

623
00:37:07,400 --> 00:37:11,600
Speaker 1: company called Monolithic Memories, and nearly two decades later that

624
00:37:11,640 --> 00:37:14,759
Speaker 1: company would merge with Advanced micro Devices, which is better

625
00:37:14,800 --> 00:37:18,600
Speaker 1: known as AMD. Drury was brought in as the new

626
00:37:18,719 --> 00:37:21,640
Speaker 1: CEO of Tesla in late two thousand and seven, so

627
00:37:21,760 --> 00:37:24,520
Speaker 1: his main job was to lead the company while the

628
00:37:24,600 --> 00:37:27,920
Speaker 1: roadster finally went into production, which happened in two thousand

629
00:37:27,920 --> 00:37:30,520
Speaker 1: and eight. But that was also a year where the

630
00:37:30,560 --> 00:37:34,120
Speaker 1: world went into a financial crisis. The real estate crisis happened.

631
00:37:34,160 --> 00:37:37,000
Speaker 1: There was like this massive blow to the economy. So

632
00:37:37,640 --> 00:37:40,719
Speaker 1: it was a really tough time, especially if you know

633
00:37:41,280 --> 00:37:43,800
Speaker 1: you had been looking forward to buying a one hundred

634
00:37:43,920 --> 00:37:47,920
Speaker 1: thousand dollars sports car that was an electric vehicle, and

635
00:37:48,000 --> 00:37:52,920
Speaker 1: now like there's a giant financial crisis in place. It's tough.

636
00:37:53,280 --> 00:37:57,280
Speaker 1: So Tesla was also affected by this. Reportedly the company

637
00:37:57,360 --> 00:37:59,720
Speaker 1: was running on fumes toward the end of two thousand

638
00:37:59,760 --> 00:38:03,319
Speaker 1: and eight, even with the Roadster finally rolling off production facilities,

639
00:38:03,640 --> 00:38:08,760
Speaker 1: Musk chose to replace Drfy with well with himself. Musk

640
00:38:08,960 --> 00:38:12,399
Speaker 1: became CEO of Tesla in late two thousand and eight.

641
00:38:12,680 --> 00:38:16,000
Speaker 1: Tesla also held a couple of rounds of layoffs to

642
00:38:16,040 --> 00:38:19,240
Speaker 1: reduce operating costs while trying to get to the finish line.

643
00:38:19,520 --> 00:38:22,600
Speaker 1: It sounds like it was a pretty tough time at Tesla,

644
00:38:22,640 --> 00:38:26,000
Speaker 1: and Musk bet big time in the company. If that

645
00:38:26,120 --> 00:38:28,960
Speaker 1: had not worked out, he would have lost a huge

646
00:38:29,000 --> 00:38:31,400
Speaker 1: amount of his wealth. But as it turns out, the

647
00:38:31,400 --> 00:38:34,040
Speaker 1: bet ultimately would pay off, though it would be several

648
00:38:34,120 --> 00:38:37,040
Speaker 1: years later before that became evident, so it wasn't even

649
00:38:37,080 --> 00:38:39,120
Speaker 1: like a sure thing. When the Roadster it came out,

650
00:38:39,239 --> 00:38:43,240
Speaker 1: people were predicting that Tesla was going to fizzle out. Meanwhile,

651
00:38:43,320 --> 00:38:48,080
Speaker 1: the co founder of the company, Mark Tarpening, also left Tesla.

652
00:38:48,200 --> 00:38:50,799
Speaker 1: He left in two thousand and eight, after Eberhard did

653
00:38:50,840 --> 00:38:53,719
Speaker 1: in two thousand and seven. He made this decision before

654
00:38:53,760 --> 00:38:56,640
Speaker 1: the Roadster was actually ready, so he both of the

655
00:38:56,640 --> 00:39:00,960
Speaker 1: co founders of Tesla left the company before the Tesla Roadster,

656
00:39:01,080 --> 00:39:04,480
Speaker 1: the first vehicle produced by the company, was rolling off

657
00:39:04,520 --> 00:39:07,239
Speaker 1: to customers. Both of them had left by then, and

658
00:39:07,440 --> 00:39:09,799
Speaker 1: Tarbaning said his decision was due to the fact that

659
00:39:10,239 --> 00:39:13,160
Speaker 1: his team had worked very hard for five years to

660
00:39:13,160 --> 00:39:17,080
Speaker 1: get the Tesla Roadster into production, and that the company

661
00:39:17,120 --> 00:39:20,800
Speaker 1: was then preparing to transition from the Roadster to developing

662
00:39:21,120 --> 00:39:24,320
Speaker 1: the next car, which was the Model S and Tarpaning

663
00:39:24,480 --> 00:39:28,560
Speaker 1: anticipated that would take another five years, and he decided

664
00:39:28,760 --> 00:39:31,080
Speaker 1: that he would rather step back and spend more time

665
00:39:31,080 --> 00:39:33,680
Speaker 1: with his family. So in two thousand and eight he

666
00:39:33,920 --> 00:39:37,440
Speaker 1: also left Tesla's which would leave Elon Musk as the

667
00:39:37,600 --> 00:39:41,120
Speaker 1: leader of the company, a position that he's held ever since.

668
00:39:41,520 --> 00:39:45,640
Speaker 1: And Tesla is the real reason why Elon Musk is

669
00:39:45,680 --> 00:39:50,760
Speaker 1: a billionaire. He was already rich before he got involved

670
00:39:50,800 --> 00:39:53,920
Speaker 1: with Tesla. He had access to generational wealth before he

671
00:39:53,960 --> 00:39:57,440
Speaker 1: got into business at all. But Tesla, a company he

672
00:39:57,520 --> 00:40:00,839
Speaker 1: didn't build but he did help fund, would put him

673
00:40:00,880 --> 00:40:03,919
Speaker 1: on the billionaire's club. The roadster would have its own

674
00:40:03,960 --> 00:40:06,799
Speaker 1: interesting life once it made out out of production. Not

675
00:40:06,920 --> 00:40:10,279
Speaker 1: all reviews of the Roadster were particularly kind. There was

676
00:40:10,320 --> 00:40:14,800
Speaker 1: a rather infamous top Gear episode that kind of slagged

677
00:40:14,840 --> 00:40:18,360
Speaker 1: off on the Roadster, but the vehicle did help set

678
00:40:18,440 --> 00:40:21,480
Speaker 1: Tesla on the path for viability, if not success. The

679
00:40:21,480 --> 00:40:25,839
Speaker 1: company would encounter other roadblocks along the way. To this day,

680
00:40:25,880 --> 00:40:29,400
Speaker 1: there are still folks who think that one Elon Musk's

681
00:40:29,440 --> 00:40:33,600
Speaker 1: compensation package with Tesla is way too high it's become

682
00:40:33,600 --> 00:40:37,320
Speaker 1: a matter for court systems to get involved. And two

683
00:40:37,440 --> 00:40:40,480
Speaker 1: Elon Musk needs to spend more time focusing on Tesla

684
00:40:40,680 --> 00:40:43,040
Speaker 1: or to create some sort of succession plan so that

685
00:40:43,120 --> 00:40:47,240
Speaker 1: someone else can take over the company instead of wasting

686
00:40:47,280 --> 00:40:50,640
Speaker 1: time on X. Those are the thoughts of various shareholders,

687
00:40:50,640 --> 00:40:53,960
Speaker 1: by the way, which I agree with, But I have

688
00:40:54,960 --> 00:40:58,360
Speaker 1: a personal disdain for Elon Musk, so I am a

689
00:40:58,520 --> 00:41:01,920
Speaker 1: very biased person and I fully admit it. But anyway,

690
00:41:01,960 --> 00:41:04,400
Speaker 1: all of that is a topic for a different time.

691
00:41:04,840 --> 00:41:08,000
Speaker 1: That is the origin story for Tesla. To me, it's

692
00:41:08,080 --> 00:41:10,440
Speaker 1: really fascinating that it's a company where you had a

693
00:41:10,440 --> 00:41:13,239
Speaker 1: couple of engineers get together. They had a very specific

694
00:41:13,360 --> 00:41:18,040
Speaker 1: goal in mind, they were able to secure funding, and

695
00:41:18,080 --> 00:41:20,640
Speaker 1: they were able to pursue that goal, and then both

696
00:41:20,640 --> 00:41:24,319
Speaker 1: of them left the company before the fruition of their

697
00:41:24,400 --> 00:41:29,360
Speaker 1: efforts became an actual thing that people could purchase. That

698
00:41:29,440 --> 00:41:33,120
Speaker 1: to me is kind of a crazy story. And obviously

699
00:41:33,160 --> 00:41:36,279
Speaker 1: there's a lot more to Tesla's story than that. There

700
00:41:36,280 --> 00:41:39,680
Speaker 1: are a lot of elements that we didn't even get

701
00:41:39,680 --> 00:41:43,680
Speaker 1: close to touching on, things like autopilot and full self

702
00:41:43,760 --> 00:41:47,640
Speaker 1: driving and all of that stuff that would require multiple episodes.

703
00:41:47,680 --> 00:41:49,719
Speaker 1: But I just wanted to focus on the beginning of

704
00:41:49,760 --> 00:41:51,880
Speaker 1: this because I thought the story itself was really interesting

705
00:41:51,880 --> 00:41:54,480
Speaker 1: and one that you don't hear very much because I

706
00:41:54,520 --> 00:41:58,200
Speaker 1: think Tesla is so closely associated with Elon Musk. But

707
00:41:58,400 --> 00:42:01,400
Speaker 1: the truth is, for the first several years, Elon Musk

708
00:42:01,440 --> 00:42:03,439
Speaker 1: really had nothing to do with the day to day

709
00:42:03,480 --> 00:42:08,200
Speaker 1: operations of that company. It was only starting around two

710
00:42:08,239 --> 00:42:10,359
Speaker 1: thousand and seven that he began to take a much

711
00:42:10,360 --> 00:42:13,439
Speaker 1: more active approach. I mean, he definitely did a lot

712
00:42:13,520 --> 00:42:16,000
Speaker 1: to help get it funded and to keep it funded.

713
00:42:16,200 --> 00:42:20,520
Speaker 1: So that's not a small thing like that's an accomplishment

714
00:42:20,560 --> 00:42:21,920
Speaker 1: all on its own, and I don't want to take

715
00:42:21,920 --> 00:42:25,360
Speaker 1: anything away from that that I think is absolutely key

716
00:42:25,600 --> 00:42:29,799
Speaker 1: to Tesla's existence, let alone success. So there we have it.

717
00:42:30,200 --> 00:42:32,799
Speaker 1: We'll probably come back to Tesla at some point. I'll

718
00:42:32,800 --> 00:42:36,080
Speaker 1: talk more about its history and its evolution over the years,

719
00:42:36,239 --> 00:42:38,920
Speaker 1: but that's it for the origin story. I hope all

720
00:42:38,960 --> 00:42:41,320
Speaker 1: of you are well, and I'll talk to you again

721
00:42:42,000 --> 00:42:51,439
Speaker 1: really soon. Tech stuff is an iHeartRadio production. For more

722
00:42:51,480 --> 00:42:56,239
Speaker 1: podcasts from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or

723
00:42:56,239 --> 00:43:01,120
Speaker 1: wherever you listen to your favorite shows. Yea y