As electric vehicles continue to grow in popularity, Tesla has become a true leader, becoming the number 1 selling car in America. But Tesla’s impact extends far past the confines of its own business operations; it has inevitably motivated other companies like Rivian, NIO, and others looking to get a piece of the EV pie. What a lot of people don’t know about Tesla though is that although Elon is at the helm of Tesla today, he didn’t really found it; he was a Series A investor. Behind Tesla’s original vision Martin Eberhard, the founder and first CEO of Tesla.
Tesla: Humble Beginnings
Tesla’s beginnings, unlike its current market standing, wasn’t always glamorous. We have to remember that electric vehicles weren’t always a hit. A quick look at history tells us that General Motors had a stint at selling electric cars, but failed. By all means, the technology hadn’t caught up to the point where commercializing electric vehicles was feasible.
That’s why Tesla’s business is an interesting one. Starting out as a startup that didn’t want to create just another sedan, it’s managed to rise above its competition and climb to its position of the best-selling car company in the United States, as of September of 2018.
But to truly understand the roots of Tesla, the Tesla before Elon Musk, the Tesla before all the controversy, you’re going to have to hear it directly from Tesla’s first CEO, and co-founder, Martin Eberhard. Fortunately, I had the opportunity to chat with Martin over the phone to dive deeper into how Tesla got started, learn about the journey that he took since his college years at the University of Illinois at Urbana-Champaign (UIUC), and how those formative years defined Tesla’s trajectory.
The Days Before Tesla
Steven: Your co-founder Marc Tarpenning didn’t attend UIUC. So how did you two meet?
Martin: We met socially at a party put on by a mutual friend. We liked talking to each other and eventually worked together on a number of consulting projects, and liked each other well enough to do consulting projects (related to automobile stuff). We then started Nuvo Media, the first e-book, in 1996. It was a bit of a jump, but after Nuvo, we started Tesla.
Steven: Let’s go back to your college days. You went to UIUC and studied Computer and Electrical Engineering. What about your college experience compelled you to pursue a career in starting EV companies in the future?
Martin: It was a long progression, really. When I graduated my Masters, I did a lot of on-campus interviews, and I ended up choosing to work at a startup. I liked the company, I liked the people, and although in retrospect it wasn’t the best job offer, that experience got me interested in what startups were. After working at that startup for a while, I left to start my own company (Nuvo). Once we finished that, Marc and I wanted to do something that wasn’t just interesting; we wanted to do something impactful. Conscientious about the environment, we were definitely looking into electric cars – that ended up turning into Tesla.
How Tesla Stood Out
Steven: Back in the day, I think GM was trying to make electric cars as well but wasn’t so effective as far as commercializing. So how did Tesla stand out at the time?
Martin: Although some companies could technically manufacture these cars, there were no companies that were truly good at commercializing them. GM did have an attempt at selling electric cars, they weren’t very successful at it, and ended up dismissing electric cars from their portfolio of products.
Early Learnings at Tesla
Steven: What was your motivation to get started and continue to grow the company?
Martin: Well, at the time, it wasn’t that I really wanted to start a car company; I honestly just wanted a car for myself. When I started Tesla, I was really surprised that electric cars were the most efficient as well. Combining my conscientiousness about the environment with seeing a real opportunity, Marc and I thought that starting a car company, despite neither of us having previously started car companies or working at any, would be a good idea.
Steven: What were some of the early realizations you had being a first-time founder in the auto industry and how did that shape the trajectory of Tesla?
Martin: First, we considered ways to stand out. Firstly, we made Tesla the first car to use AC induction motor, other than the GM EV1. But at the same time, we were also aiming for a different kind of demographic. Not wanting it to just be “just another car,” we deliberately aimed for high quality and wanted to make our cars luxury products. Coupled with its performance, we thought we had carved out a unique niche that other companies, such as GM, didn’t figure out how to capitalize on before.
Steven: After Tesla, you went on to found another EV company, which later became a part of SF Motors. What problems did you see with EVs in your previous experiences that made you want to continue to tackle EVs?
Martin: After Tesla, I worked at Volkswagen for a couple of years. Mainly, I wanted to gain more experience and working at Volkswagen certainly had its benefits. At the same time, though, working at a car company is far different from starting one. Starting a company is nuts. After working at Volkswagen for a number of years, I started InEvit, a technology company. I took the problems that I noticed at Volkswagen and ended up capitalizing on them through InEvit. SF Motors eventually bought us out, and I joined their team soon after. But I was only at SF Motors for a short amount of time before I wanted to start something new again. Although I can’t talk too much about, I started a new company, Tiveni Inc., in this space, and that’s what I’m working on nowadays.
Tesla indisputably changed the automobile industry and opened doors for sustainability that was once believed to be commercially infeasible. Although it’s often interesting to read what Elon has to say on Twitter and of course, recognize his strong work ethic in growing Tesla to the $33.70 billion company that it is today, it’s arguably more interesting to learn how accurate Martin’s vision was over 15 years ago. Oh, and recognize the impeccable execution his team had in those early days.
Martin shows us that risk-taking entrepreneurs are the ones who eventually see their ventures turn into companies that change the world. And in a space as large as the EV market we know today too? He exemplifies that entrepreneurial spirit, dedication, and execution goes a long way