Since Tesla produced the first Roadster sports car in 2008, Tesla Motors Inc. (NASDAQ: TSLA) and its chief executive officer (CEO) Elon Musk have cemented their status as icons of technology and innovation. Now with big corporations like PepsiCo., Wal-Mart and Anheuser-Busch Inbev placing big orders for the electric semi-autonomous truck, Tesla is digging in deeper.
While automakers such as Ford Motor Company (NYSE: F) and General Motors Company (NYSE: GM) have dabbled in electric vehicles as part of their larger lineups, Tesla is the most well-known name focusing solely on electric cars. But as the competition is increasing, Tesla has come under fire for production issues, slow deliveries and burning through cash. In Q2 2018, Tesla predicted that it would need to produce 7,000 cars a week, or 350,000 a year, in order to become sustainably profitable. Tesla fell short of that number in Q3 2018, managing to produce roughly 4,300 units per week, but still reported revenues of $6.8 billion compared to $2.9 billion over the same period last year.
Tesla is Musk's fourth big technology venture, following successful launches of Zip2, PayPal Corporation (NASDAQ: PYPL), and SpaceX. Most people are probably familiar with the Tesla story, but here are a few things that people may not know about the electric automotive company and its leader.
Tesla Wasn't Exactly Founded by Musk
When it comes to Tesla and Musk, it's difficult to think of one without the other. With that type of connection, many may assume that Musk is the founder of the company, but that's actually not the case.
Martin Eberhard and Marc Tarpenning founded Tesla in 2003. Musk didn't join the company until 2004, when he led the company's Series A round of investments, joining Tesla's board of directors in the process. This fact is a bit complicated because the company considers Musk a founder in its corporate governance. This hasn't sat well with Eberhard over the years, who attempted to sue Musk in 2009 for "changing history."
Tesla's Designs Are Open-Sourced
On June 12, 2014, Musk posted a blog entry on Tesla's website titled "All Our Patents Belong to You." In the post, Musk talks about his goal of creating sustainable transportation for everyone, and he felt that enforcing patents on Tesla's technology would inhibit that goal. In essence, Musk said that he wanted the world to move in this direction, even if it came at Tesla's expense. Anybody with the time, resources and motivation could build their own electric car by using Tesla's own blueprints.
Musk Spent Just Two Days in Grad School
In 1995, Musk graduated from the University of Pennsylvania with degrees in physics and economics. Upon completion of those programs, he moved to California to begin work towards a Ph.D. in physics at Stanford. Musk didn't take long to decide that the graduate program wasn't for him. He left Stanford after just two days to focus on his software company, Zip2, instead.
Tesla's Sales Model Is Illegal in Most States
Tesla's former direct-to-consumer sales model is unique in the auto industry, but in most places, it's actually illegal.
Until recently, Tesla didn't have any dealerships. Instead, it operated showrooms where consumers could see some of the vehicle models up close and learn about their features. There were no sales people, no test drives, and in most cases the showroom personnel wouldn't even quote a price. Anybody wishing to buy a Tesla needed to go online, order the car, and wait for it to be delivered.
Most states have laws requiring that vehicles sales be completed through licensed dealerships. With Tesla previously operating zero dealerships, the company would not be allowed to sell vehicles directly to the consumer, and would instead be left with only the online sales option. Some states are beginning to soften their stance on this requirement, and Tesla has begun changing to sell cars in their showrooms and specific dealerships
Tesla Comes With a Built-In Insane Mode
Models with the P85D engine can flip the car to "Insane Mode," which puts all of the vehicle's power into acceleration at once, and covers the distance in 3.2 seconds. Not to be outdone, cars with the P90D engine have a similar "Ludicrous Mode," a clever nod to "Spaceballs," one of Musk's favorite films.
Elon Musk Doesn't Have a Salary
Musk isn't scraping to get by, but he also isn't living on a week-to-week paycheck either. Musk's payment plan recently changed so that he gets massive payouts when the company hits specific financial goals. If the company hits its goals, a market cap of $650 billion for example, Musk could see a payday of up to $55.8 billion.