As we all know, Elon Musk became an industry icon and a rich man thanks to Tesla. On January 22nd Tesla’s market capitalisation crossed the $100 bn mark for the first time,media reported. The company’s shares rose sharply after reporting much-anticipated fourth-quarter results. If Tesla continues to reach its stock milestone, Musk will receive generous compensation packages, including options worth more than $55 billion.
But Musk said in a recent episode of the “Third Row Tesla” podcast that at first, he really didn’t want to be Tesla’s chief executive.
In fact, Musk has a completely different idea of how to manage the company.
In 2003, he recalls, he was inspired to build an all-electric sports car after testing a model of an electric car called tzero. At the age of 32, he became a millionaire because of two successful start-up sales.
“The first tzero model actually didn’t have a door, roof, airbag or an effective cooling system. It can be said that it is not safe or reliable,” he said.
According to Musk, AC Propulsion, the model’s manufacturer, has no interest in bringing the tzero to market, but he is confident it will work. So Musk asked Alan Cocconi, the founder of AC Propulsion, and Tom Gage, the chief executive, if he could commercialize the tzero. According to Musk, they agreed.
At the time, there were only hybrid electric vehicles in the U.S. market (with both gasoline and electric motors): Honda launched Insight in 1999 and Toyota launched the Prius in 2000.
The only problem with starting a new electric car company is that Musk started spaceX, an aerospace company, a year ago and doesn’t want to start a new one. At SpaceX, he says, he already works 80 hours a week, and he wants to avoid working 160 hours a week.
As a result, AC Propulsion CEO Gage suggested Musk talk to electric car start-up Tesla. Musk believes that by working with another company, he can still run SpaceX and pursue his passion for electric cars in his spare time.
“I don’t think it’s going to be easy, but I think maybe I can allocate 20 to 30 hours a week to work on product engineering, and then someone else can fix the rest,” Musk said. “But such a solution didn’t work. “
Musk used his own money to sell PayPal to invest $6.3 million in Tesla in 2004, according tomedia.
At the time, the company had five co-founders: Martin Eberhard and Marc Tarpenning, who founded the original Tesla in 2003, as well as Ian Wright, JB Straubel and Musk.
But according to Musk, the appointment of the chief executive was “dramatic.”
“Because I really don’t want to be CEO and I’m trying to get SpaceX working, they let me choose the CEO,” Musk said in the podcast. “
According to Musk, he fixed the candidate between Eberhard and Wright. He eventually chose Eberhard with the help of Straubel and Tarpenning.
Eberhard and Wright, however, have different memories of things.
“It’s not true,” Wright said in an interview. When they met Musk, he said, “Martin was already Tesla’s CEO.”
“No one is talking about a CEO other than Martin as CEO,” Wright said. According to him, Musk said he would serve as chairman of the board.
Eberhard also disagreed with Musk. “I was CEO and Musk was a board member. “
In any case, Wright left Tesla in 2004. (Wright thinks he chose to leave, and Eberhard thinks he’s fired.) )
Between 2004 and 2007, the Tesla team worked on the development of the first Tesla sports car, the Roadster, and was also looking for investors. According to Musk, they got off to a difficult start under Eberhard as chief executive.
Musk said on the podcast that early Tesla experienced obstacles, including a flawed prototype.
“We’re really just stuffing electric car parts into Lotus Elise,” Musk said of the first prototype. (Sports car maker Lotus allows Tesla to manufacture and test Roadster at its UK plant.) )
“In retrospect, it wasn’t a good idea,” Musk said in a podcast. “Ultimately, the car is 60 per cent heavier than Elise. We’re in a lot of trouble and the cost is going up crazy. “
According tomedia reports, The production of Roadster was originally scheduled to begin in September 2007 at a price of $109,000. That summer, however, the internal audit found that the cost of production per vehicle was actually $140,000. Musk blamed Eberhard.
“Obviously, we have to fire Eberhard, and we have no choice about that,” Musk said on the podcast. “It was really bad. “
“The story about the 2007 audit is untrue and defamatory,” Says Eberhard. (Eberhard sued Musk and Tesla in 2009 for defamation, accusing him of being forced to leave the company.) He later dropped the lawsuit. )
Michael Marks later took over as interim CEO. Ze’ev Drori then became chief executive and launched Roadster in 2008 at a six-figure price tag.
After deciding to put more of his fortune into the company, Musk finally became chief executive in October 2008. Musk and his brother, Tesla investor Kimbal Musk, said on the podcast that it is difficult to find a qualified CEO because Tesla is not a typical petrol car company and has a entrepreneurial culture.
Roadster started production in 2009 and Tesla went on sale in June 2010.
Even as a public company, the road is bumpy, but Tesla now has six models, including the new Cybertruck. Tesla also sells home solar products.
Along the way, both Musk and Tesla have been repeatedly praised and criticized for overcommitment and production delays, and the company’s share price fell to a three-year low last June. Not to mention his troubles with the Securities and Exchange Commission (which has settled) and recent lying suits (which he won).
But for Musk, at least, things seem to have improved, with Tesla’s share price hitting an all-time high after it began producing model Y at its new Shanghai plant. As a result, Tesla became the first U.S.-listed automaker to hit the $100 billion mark.
Musk is now worth nearly $35 billion and owns about 20 percent of Tesla, according to Forbes. (SpaceX was valued at about $33 billion as of May, according to CNBC.) )
Of course, Tesla’s success has something to do with the plan Musk initially tried to avoid. In 2018, Musk said in a television interview that he works 120 hours a week at Tesla after encountering production problems with the Model 3.
“Tesla is a company that you do your best not want to be CEO,” Kimbal Musk said in a podcast.
“Yes,” Musk said. “It’s going to be misunderstood that I don’t like Tesla, but I really like Tesla. I’m not exaggerating, but I mean the pain is extreme. “