Tesla Motors was a marginal startup outsider in the car industry in the early 2000s.
It faced naysayers because “no one was doing electric cars,” CEO Elon Musk said in February on the podcast “Third Row Tesla.”
Yet despite the odds, Tesla became the most successful automaker in the world-on July 1, for the first time, its market capitalization exceeded Toyota’s.
And thanks to Tesla’s success, according to the Bloomberg Billionaire List, on Friday CEO Musk became the seventh-richest person in the world. Currently, his net worth is $70.5 billion. (Musk also exceeded legendary investor Warren Buffett in property, worth $69.2 billion, even though Buffett reported on Wednesday a grant of nearly $3 billion in Berkshire Hathaway shares).
During the “Third Row Tesla” podcast in February, Musk recalled the experience that prompted him to initially invest in Tesla.
Musk, long interested in sustainability and electric cars, was test driving a model car called the Tzero in 2003.
′[The first Tzero model] literally didn’t have doors or a roof, or any airbags or an effective cooling system. It was not safe or reliable,” said Musk on the podcast. But it fascinated him.
Built in 1997 by a small California company named AC Propulsion, the electric sports car was essentially a version of “the prototypical Tesla Roadster,” according to Wired. But while AC Propulsion founder Alan Cocconi and CEO Tom Gage were “technology visionaries,” according to Wired, they did not have “the entrepreneurial vision to see just how big an idea it could become” or “the means to achieve it.”
Musk has. He was inspired, and saw an opportunity to market the electric car.
Although Musk did not wish to take on another startup (he had just founded SpaceX), he asked Cocconi and Gage if he could market the Tzero. According to Musk, they agreed and Gage suggested that Musk talk with Tesla Motors, an electric car startup, and its founders, engineers Martin Eberhard and Marc Tarpenning, who were also looking to market the Tzero.
According to Wired, with money Musk received as a co-founder of PayPal, which eBay bought for $1.5 billion in 2002, he invested $6.3 million in Tesla Motors startup in 2004. (The company had five co-founders: Eberhard and Tarpenning, who began the original Tesla Motors in 2003, and Ian Wright, JB Straubel and Musk.)
Four years later, having decided to invest more of his personal fortune in the company, Musk became Tesla’s CEO.
“Major credit to AC Propulsion for the Tzero electric sports car 1997-2003 that inspired Tesla Roadster,” the first release of the electric car company, Musk tweeted in December 2018.
“Without that, Tesla wouldn’t exist or would have started much later.”
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