Tesla, Inc.
American electric vehicle and clean energy company / From Wikipedia, the free encyclopedia
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Tesla, Inc. (/ˈtɛslə/ TESS-lə or /ˈtɛzlə/ TEZ-lə[lower-alpha 1]) is an American multinational automotive and clean energy company headquartered in Austin, Texas, which designs, manufactures and sells electric vehicles, stationary battery energy storage devices from home to grid-scale, solar panels and solar shingles, and related products and services.
Formerly | Tesla Motors, Inc. (2003–2017) |
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Company type | Public |
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ISIN | US88160R1014 |
Industry | |
Founded | July 1, 2003; 20 years ago (2003-07-01) in San Carlos, California, U.S. |
Founders | See § Founding |
Headquarters | Gigafactory Texas, Austin, Texas , U.S. |
Number of locations | 1,208 sales, service and delivery centers |
Area served |
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Key people |
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Products | |
Production output |
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Services | |
Revenue | US$96.8 billion (2023) |
US$8.9 billion (2023) | |
US$15.0 billion (2023) | |
Total assets | US$106.6 billion (2023) |
Total equity | US$62.6 billion (2023) |
Owner | Elon Musk (13%)[1] |
Number of employees | 140,473 (2023) |
Subsidiaries | |
Website | tesla.com |
Footnotes / references Financials as of December 31, 2023[update]. References: [2][3][4] |
Tesla was incorporated in July 2003 by Martin Eberhard and Marc Tarpenning as Tesla Motors. The company's name is a tribute to inventor and electrical engineer Nikola Tesla. In February 2004 Elon Musk joined as the company's largest shareholder and in 2008 he was named CEO. In 2008, the company began production of its first car model, the Roadster sports car, followed by the Model S sedan in 2012, the Model X SUV in 2015, the Model 3 sedan in 2017, the Model Y crossover in 2020, the Tesla Semi truck in 2022 and the Cybertruck pickup truck in 2023. The Model 3 is the all-time bestselling plug-in electric car worldwide, and in June 2021 became the first electric car to sell 1 million units globally.[6] In 2023, the Model Y was the best-selling vehicle, of any kind, globally.[3]
Tesla is one of the world's most valuable companies. In October 2021, Tesla's market capitalization temporarily reached $1 trillion, the sixth company to do so in U.S. history. In 2022, the company led the battery electric vehicle market, with 18% share. As of 2023[update], it is the world's most valuable automaker. Also in 2023, the company was ranked 69th in the Forbes Global 2000.[7]
Tesla has been the subject of lawsuits, government scrutiny, and journalistic criticism, stemming from allegations of whistleblower retaliation, worker rights violations, product defects, and Musk's many controversial statements.
Founding (2003–2004)
The company was incorporated as Tesla Motors, Inc. on July 1, 2003, by Martin Eberhard and Marc Tarpenning.[8][9] They served as CEO and CFO, respectively.[10] Eberhard said that he wanted to build "a car manufacturer that is also a technology company", with its core technologies as "the battery, the computer software, and the proprietary motor".[11]
Ian Wright was Tesla's third employee, joining a few months later.[8] In February 2004, the company raised US$7.5 million (equivalent to $12 million in 2022) in series A funding, including $6.5 million (equivalent to $10 million in 2022) from Elon Musk, who had received $100 million from the sale of his interest in PayPal two years earlier. Musk became the chairman of the board of directors and the largest shareholder of Tesla.[12][13][10] J. B. Straubel joined Tesla in May 2004 as chief technical officer.[14]
A lawsuit settlement agreed to by Eberhard and Tesla in September 2009 allows all five – Eberhard, Tarpenning, Wright, Musk, and Straubel – to call themselves co-founders.[15]
Roadster (2005–2009)
Elon Musk took an active role within the company, but was not deeply involved in day-to-day business operations.[16] The company's strategy was to start with a premium sports car aimed at early adopters and then move into more mainstream vehicles, including sedans and affordable compacts.[17]
In February 2006, Musk led Tesla's Series B venture capital funding round of $13 million, which added Valor Equity Partners to the funding team.[18][13] Musk co-led the third, $40 million round in May 2006 which saw investment from prominent entrepreneurs including Google co-founders Sergey Brin and Larry Page, and former eBay President Jeff Skoll.[19] A fourth round worth $45 million in May 2007 brought the total private financing investment to over $105 million.[19]
In August 2007, Eberhard was asked by the board, led by Elon Musk, to step down as CEO.[20] Eberhard then took the title of "President of Technology" before ultimately leaving the company in January 2008. Co-founder Marc Tarpenning, who served as the Vice President of Electrical Engineering of the company, also left the company in January 2008.[21] In August 2007, Michael Marks was brought in as interim CEO, and in December 2007, Ze'ev Drori became CEO and President.[22] Musk succeeded Drori as CEO in October 2008.[22] In June 2009, Eberhard filed a lawsuit against Musk for allegedly forcing him out.[23][needs update]
Tesla began production of the Roadster in 2008 inside the service bays of a former Chevrolet dealership in Menlo Park.[24][25] By January 2009, Tesla had raised $187 million and delivered 147 cars. Musk had contributed $70 million of his own money to the company.[26]
In June 2009, Tesla was approved to receive $465 million in interest-bearing loans from the United States Department of Energy. The funding, part of the $8 billion Advanced Technology Vehicles Manufacturing Loan Program, supported the engineering and production of the Model S sedan, as well as the development of commercial powertrain technology.[27] Tesla repaid the loan in May 2013, with $12 million in interest.[28][29]
IPO, Model S, and Model X (2010–2015)
In May 2010, Tesla purchased what would later become the Tesla Factory in Fremont, California, from Toyota for $42 million,[30] and opened the facility in October 2010 to start production of the Model S.[31] On June 29, 2010, the company went public via an initial public offering (IPO) on the NASDAQ, the first American car company to do so since the Ford Motor Company had its IPO in 1956.[32] The company issued 13.3 million shares of common stock at a price of $17 per share, raising $226 million.[33]
In January 2012, Tesla ceased production of the Roadster, and in June the company launched its second car, the Model S luxury sedan.[34] The Model S won several automotive awards during 2012 and 2013, including the 2013 Motor Trend Car of the Year,[35] and became the first electric car to top the monthly sales ranking of a country, when it achieved first place in the Norwegian new car sales list in September 2013.[36] The Model S was also the bestselling plug-in electric car worldwide for the years 2015 and 2016.[37]
Tesla announced the Tesla Autopilot, a driver-assistance system, in 2014. In September that year, all Tesla cars started shipping with sensors and software to support the feature, with what would later be called "hardware version 1".[38]
Tesla entered the energy storage market, unveiling its Tesla Powerwall (home) and Tesla Powerpack (business) battery packs in April 2015.[39] The company received orders valued at $800 million within a week of the unveiling.[40]
Tesla began shipping its third vehicle, the luxury SUV Tesla Model X, in September 2015, which had 25,000 pre-orders at the time.[41][42]
SolarCity and Model 3 (2016–2018)
Tesla entered the solar installation business in November 2016 with the purchase of SolarCity, in an all-stock $2.6 billion deal.[43] The business was merged with Tesla's existing battery energy storage products division to form the Tesla Energy subsidiary.[44] The deal was controversial because at the time of the acquisition, SolarCity was facing liquidity issues of which Tesla's shareholders were not informed.[45] In February 2017, Tesla Motors changed its name to Tesla, Inc. to better reflect the scope of its expanded business.[46]
Tesla unveiled its first mass market vehicle in April 2016, the Model 3 sedan. Compared to Tesla's previous luxury vehicles, the Model 3 was less expensive and within a week the company received over 325,000 paid reservations.[47] In an effort to speed up production and control costs, Tesla invested heavily in robotics and automation to assemble the Model 3. Instead, the robotics actually slowed the production of the vehicles,[48] leading to significant delays and production problems, a period which the company would later come to describe as "production hell."[49][50] By the end of 2018, the production problems had been overcome, and the Model 3 would become the world's bestselling electric car from 2018 to 2021.[51][52]
This period of production hell put significant financial pressure on Tesla, and during this time it became one of the most shorted companies in the market. On August 8, 2018, amid the financial issues, Musk posted on social media that he was considering taking Tesla private.[53][54] The plan did not materialize and gave rise to much controversy and many lawsuits including a securities fraud charge from the SEC, which would force Musk to step down as the company's chairman, although he was allowed to remain CEO.
Global expansion and Model Y (2019–present)
From July 2019 to June 2020, Tesla reported four consecutive profitable quarters for the first time, which made it eligible for inclusion in the S&P 500.[55] Tesla was added to the index on December 21, 2020.[56] It was the most valuable company ever added, and was the sixth-largest member of the index immediately after it was added.[56] During 2020, the share price increased 740%,[57] and on January 26, 2021, its market capitalization reached $848 billion,[58] more than the next nine largest automakers combined and becoming the fifth most valuable company in the US.[59][60]
Tesla introduced its second mass-market vehicle in March 2019, the Model Y mid-size crossover SUV, based on the Model 3.[61][62] Deliveries started in March 2020.[63]
During this period, Tesla invested heavily in expanding its production capacity, opening three new Gigafactories in quick succession. Construction of Gigafactory Shanghai started in January 2019, as the first automobile factory in China fully owned by a foreign company (not a joint venture).[64] The first production vehicle, a Model 3, rolled out of the factory in December, less than one year after groundbreaking.[65] Gigafactory Berlin-Brandenburg broke ground in February 2020,[66] and production of the Model Y began in March 2022.[67] Gigafactory Texas broke ground in June 2020,[68] production of the Model Y began in April 2022,[69] and production of the Cybertruck began in November 2023.[70] In March 2023, Tesla announced plans for a Gigafactory Mexico to open in 2025.[71]
At the beginning of the COVID-19 pandemic, Tesla closed the Fremont Factory in March 2020 due to California state and Alameda county COVID restrictions.[72] When California lifted restrictions, but the county did not, Tesla sued the county, and restarted production on May 11, 2020.[73] The county lifted restrictions on May 13, 2020, and Tesla dropped its lawsuit.[74] After the dispute with county officials, on December 1, 2021, Tesla moved its legal headquarters to Gigafactory Texas.[75][76] However, Tesla continued to use its former headquarters building in Palo Alto, and over the next two years significantly expanded its footprint in California. The company opened its Megafactory to build Megapack batteries in Lathrop, California in 2022,[77] and announced in February 2023 that it would establish a large global engineering headquarters in Palo Alto, moving into a corporate campus once owned by Hewlett Packard.[78]
Tesla became a major investor in bitcoin, acquiring $1.5 billion of the cryptocurrency,[79] and on March 24, 2021, the company started accepting bitcoin as a form of payment for US vehicle purchases.[80] However, after 49 days, the company ended bitcoin payments over concerns that the production of bitcoin was contributing to the consumption of fossil fuels, against the company's mission of encouraging the transition to sustainable energy.[81] After the announcement, the price of bitcoin dropped around 12%.[82] In July 2022 it was reported that Tesla had sold about 75% of its bitcoin holdings at a loss, citing that the cryptocurrency was hurting the company's profitability.[83]
As of November 2023[update], Tesla offers six vehicle models: Model S, Model X, Model 3, Model Y, Tesla Semi, and Cybertruck. Tesla's first vehicle, the first-generation Tesla Roadster, is no longer sold. Tesla has plans for a second-generation Roadster.
Available products
Model S
The Model S is a full-size luxury car with a liftback body style and a dual motor, all-wheel drive layout. Development of the Model S began prior to 2007 and deliveries started in June 2012. The Model S has seen two major design refreshes, first in April 2016 which introduced a new front-end design and again in June 2021 which revised the interior. The Model S was the top-selling plug-in electric car worldwide in 2015 and 2016. More than 250,000 vehicles have been sold as of December 2018[update] (when Tesla merged production numbers for the Model S and Model X).
Model X
The Model X is a mid-size luxury crossover SUV offered in 5-, 6- and 7-passenger configurations with either a dual- or tri-motor, all-wheel drive layout. The rear passenger doors open vertically with an articulating "falcon-wing" design. A prototype Model X was first shown in February 2012 and deliveries started in September 2015.[84] The Model X shares around 30 percent of its content with the Model S. The vehicle has seen one major design refresh in June 2021 which revised the interior.
Model 3
The Model 3 is a mid-size car with a fastback body style and either a dual-motor, all-wheel drive layout or a rear-motor, rear-wheel drive layout. The vehicle was designed to be more affordable than the luxury Model S sedan. A prototype Model 3 was first shown in 2016 and within a week the company received over 325,000 paid reservations.[47] Deliveries started in July 2017.[85] The Model 3 ranked as the world's bestselling electric car from 2018 to 2021,[86][87][88] and cumulative sales passed 1 million in June 2021.[6] The vehicle has seen one major design refresh in September 2023 which revised the exterior and interior.
Model Y
The Model Y is a mid-size crossover SUV offered in 5- and 7-passenger configurations with a single‐motor, rear-wheel drive or a dual-motor, all-wheel drive layout. The vehicle was designed to be more affordable than the luxury Model X SUV. A prototype Model Y was first shown in March 2019,[61] and deliveries started in March 2020.[63] The Model Y shared around 75 percent of its content with the Model 3.[62] In the first quarter of 2023, the Model Y outsold the Toyota Corolla to become the world's best-selling car, the first electric vehicle to claim the title.[89]
Tesla Semi
The Tesla Semi is a Class 8 semi-truck by Tesla, Inc. with a tri-motor, rear-wheel drive layout. Tesla claims that the Semi has approximately three times the power of a typical diesel semi truck, a range of 500 miles (800 km).[90] Two prototype trucks were first shown in November 2017 and initial deliveries were made to PepsiCo on December 1, 2022.[91] As of December 2023[update], the truck remains in pilot production.[3]
Cybertruck
The Cybertruck is a full-sized pickup truck. First announced in November 2019, pilot production began in July 2023, after being pushed back multiple times, and deliveries began on November 30, 2023. Three models are offered: rear-wheel drive, dual-motor all-wheel drive, and tri-motor all-wheel drive, with EPA range estimates of 320–340 miles (510–550 km), depending on the model. The truck's exterior design made from flat sheets of unpainted stainless steel earned a notably polarizing reception from media.[92][93][94]
Announced products
Roadster (second generation)
On November 16, 2017, Tesla unveiled the second generation Roadster with a purported range of 620 miles (1,000 km) with a 200 kilowatt-hours (720 MJ) battery pack that would achieve 0–60 miles per hour (0–97 km/h) in 1.9 seconds; and 0–100 mph (0–161 km/h) in 4.2 seconds,[95] and a top speed over 250 mph (400 km/h). A "SpaceX Package" would include cold-gas thrusters.[96] The vehicle would have three electric motors, allowing all-wheel drive and torque vectoring during cornering.[96] The base price was set at $200,000.[96] Musk has said that the Roadster should ship in 2024.[97]
Tesla next-generation vehicle
The Tesla next-generation vehicle is an announced battery electric platform. It would become the third platform for the company. Vehicles based on this platform are not expected before 2025.[98]
Discontinued product
Tesla Roadster
The original Tesla Roadster[99] was a two-seater sports car, evolved from the Lotus Elise chassis.[100] It was produced from 2008 to 2012. The Roadster was the first highway-legal serial production electric car to use lithium-ion battery cells and the first production all-electric car to travel more than 200 miles (320 km) per charge.
Connectivity services
Tesla cars come with "Standard Connectivity", which provides navigation using a cellular connection. For a fee, Tesla offers a subscription to "Premium Connectivity" which adds live traffic and satellite maps to navigation, internet browsing, and media streaming.[101]
Vehicle servicing
Tesla’s strategy is to service its vehicles first through remote diagnosis and repair. If it is not possible to resolve a problem remotely, a mobile technician is dispatched or customers are referred to a local Tesla-owned service center.[102][103] Tesla has said that it does not want to make a profit on vehicle servicing, which has traditionally been a large profit center for most auto dealerships.[104]
In 2016, Tesla recommended having any Tesla car inspected every 12,500 miles or once a year, whichever comes first. In early 2019, the manual was changed to say: "your Tesla does not require annual maintenance and regular fluid changes," and instead it recommends periodic servicing of the brake fluid, air conditioning, tires and air filters.[105]
Charging services
Supercharger network
Supercharger is the branding used by Tesla for its high-voltage direct current fast chargers.
Destination charging location network
Tesla also has a network of "Destination Chargers," slower than Superchargers and intended for locations where customers are expected to park and stay for several hours, such as hotels, restaurants, or shopping centers. Unlike the Supercharger network, Tesla does not own the destination chargers, instead, property owners set up the devices and set pricing.[106] When the network first launched in 2014, Tesla provided free charging equipment and covered installation costs.[107] One of the largest providers is hotel chain Hilton Worldwide which in 2023 announced an agreement with Tesla to install 20,000 chargers across 2,000 of its properties in North America by 2025.[108]
Insurance services
Tesla has offered its own vehicle insurance in the United States since 2017 and has been acting as an independent insurance producer since 2021 as Tesla Insurance Services, Inc. It was introduced after the American Automobile Association (AAA), a major insurance carrier, raised rates for Tesla owners in June 2017 after a report concluded that the automakers vehicles crashed more often and were more expensive to repair than comparable vehicles.[109] A study in 2018 based on data from the Insurance Institute for Highway Safety confirmed the findings.[110]
The company says that it uniquely understands its vehicles, technology and repair costs, and can eliminate traditional insurance carriers' additional charges.[111] In states where allowed, the company uses individual vehicle data to offer personalized pricing that can increase or decrease in cost based on the prior month's driving safety score.[112]
As of January 2023[update], Tesla offers insurance in the U.S. states of Arizona, California, Colorado, Illinois, Maryland, Minnesota, Nevada, Ohio, Oregon, Texas, Utah and Virginia.[113] The company also offers insurance for Tesla vehicle owners with non-Tesla vehicles.[111]
Tesla subsidiary Tesla Energy develops, builds, sells and installs solar energy generation systems and battery energy storage products (as well as related products and services) to residential, commercial and industrial customers. The subsidiary was created by the merger of Tesla's existing battery energy storage products division with SolarCity, a solar energy company that Tesla acquired in 2016.[114] In 2023, the company deployed 14.7 gigawatt-hours of battery energy storage products, an increase of 125% over 2022, but only deployed solar energy systems capable of generating 223 megawatts, a decrease of 36% over 2022.[115]
Tesla Energy products include solar panels (built by other companies for Tesla), the Tesla Solar Roof (a solar shingle system) and the Tesla Solar Inverter. Storage products include the Powerwall (a home energy storage device) and the Megapack (a large-scale energy storage system).[116][117][118]
For large-scale customers, Tesla Energy operates an online platform which allows for automated, real-time power trading, demand forecasting and product control.[119][120][121] In March 2021, the company said its online products were managing over 1.2 GWh of storage.[122] For home customers, the company operates a virtual power company in Texas called Tesla Electric, which utilizes the company's online platforms to manage customers Powerwall devices, discharging them into the grid to sell power when prices are high, earning money for customers.[123][124]
At the time of Tesla's founding in 2003, electric vehicles were very expensive.[125] In 2006, Elon Musk stated that Tesla's strategy was to first produce high-price, low-volume vehicles, such as sports cars, for which customers are less sensitive to price. This would allow them to progressively bring down the cost of batteries, which in turn would allow them to offer cheaper and higher volume cars.[17][126] Tesla's first vehicle, the Roadster, was low-volume (fewer than 2,500 were produced) and priced at over $100,000. The next models, the Model S and Model X, are more affordable but still luxury vehicles. The most recent models, the Model 3 and the Model Y, are priced still lower, and aimed at a higher volume market,[127][128] selling over 100,000 vehicles each quarter. Tesla continuously updates the hardware of its cars rather than waiting for a new model year, as opposed to nearly every other car manufacturer.[129]
Unlike other automakers, Tesla does not rely on franchised dealerships to sell vehicles. Instead, the company directly sells vehicles through its website and a network of company-owned stores.[130][131] The company is the first automaker in the United States to sell cars directly to consumers.[132][133] Some jurisdictions, particularly in the United States, prohibit auto manufacturers from directly selling vehicles to consumers. In these areas, Tesla has locations that it calls galleries that the company says "educate and inform customers about our products, but such locations do not actually transact in the sale of vehicles."[134][135] In total, Tesla operates nearly 400 stores and galleries in more than 35 countries.[136] These locations are typically located in retail shopping districts, inside shopping malls, or other high-traffic areas,[131] instead of near other auto dealerships.[137][138][139]
Analysts describe Tesla as vertically integrated given how it develops many components in-house, such as batteries, motors, and software.[141] The practice of vertical integration is rare in the automotive industry, where companies typically outsource 80% of components to suppliers and focus on engine manufacturing and final assembly.[142][143][144]
Tesla generally allows its competitors to license its technology, stating that it wants to help its competitors accelerate the world's use of sustainable energy.[145] Licensing agreements include provisions whereby the recipient agrees not to file patent suits against Tesla, or to copy its designs directly.[146] Tesla retains control of its other intellectual property, such as trademarks and trade secrets to prevent direct copying of its technology.[147]