Priced at $17 per share just seven years ago, the Tesla IPO ended up being a total bargain for anyone lucky enough to get in.
However, this view comes with the benefit of plenty of hindsight – and even Elon Musk would tell you that it wasn’t always obvious that the company would be around in 2017. There were periods of time when layoffs were rampant, the company’s payroll was covered by credit cards, and Tesla was on the brink of bankruptcy.
Rise of Tesla: The History (Part 1 of 3)
Today’s massive infographic comes to us from Global Energy Metals, and it is the first part of our three-part Rise of Tesla Series, which will soon be a definitive source for everything you ever wanted to know about the company.
Part 1 deals with the origin story of the company, challenges faced by the first EVs, the company’s strategy and initial execution, and the Tesla Roadster’s development.
Tesla was initially conceived in 2003 out of the vision of two Silicon Valley engineers, Martin Eberhard and Marc Tarpenning. The partners had just sold their eReader company for $187 million, and were looking for their next big idea.
The infamous “death” of GM’s EV1 electric car that year ended up being a source of inspiration, and the two engineers started looking into ways to reduce the world’s reliance on Middle Eastern oil and to combat climate change.
The electric car pathway was not just better than the other choices that were out there – it was dramatically better.
– Martin Eberhard, Tesla co-founder
The company was bootstrapped until Elon Musk led the $7.5 million Series A round in February 2004 and became the controlling investor. He joined the board of directors as its chairman, and took on operational roles as well.
At this time, JB Straubel – who famously rebuilt an electric golf cart when he was only 14 years old – also joined the company as CTO.
Tesla’s initial strategy was to build a high performance sports car first, for a few reasons:
- It would shed the existing stigma around EVs
- Sports cars have higher margins
- Fewer cars would need to be produced
- High-end buyers are less price-sensitive
Instead of building the Tesla Roadster from scratch, the company aimed to combine an existing chassis with an AC induction motor and battery. And so, the company signed a contract with British sports car maker Lotus to use its Elise chassis as a base.
The Roadster made its debut at a star-studded launch party in Santa Monica. The 350-strong guestlist of Hollywood celebrities and the press were wowed by the 2-seater sports car with a $100,000 price tag.
This is not your father’s electric car.
– The Washington Post
What the audience didn’t notice?
The Roadsters had many issues that needed to be fixed – these and others would delay Tesla well beyond the planned Summer 2007 delivery date.
The Dark Years
Tesla’s original business plan was built on the idea that the auto industry had changed drastically.
Automakers now focused on core competencies like financing, engine design, sales and marketing, and final assembly – getting the hundreds of individual car parts, like windshield wiper blades or door handles, was actually outsourced.
This was supposed to make it easy for Tesla to get its foot in the door – to focus on the EV aspect and let Lotus do the rest. Instead, the company experienced an “elegance creep” phenomenon. They were able to keep making the car nicer, but it meant customizing individual parts.
Costs spiraled out of control, things got delayed, and the car began to take a very different shape than the Elise. By the time it was said and done, the Tesla Roadster was nothing like its Lotus cousin, sharing only 7% parts by count.
The Revolving Door
During this process, there was a revolving door of CEOs.
2007: Eberhart was forced to resign as CEO in August
2007: Early Tesla investor Michael Marks took the reins temporarily
2007: In November, Ze’ev Drori took over as CEO and President
2008: After less than a year of Drori’s run, Musk stepped in to take over the role in October
At this point, Musk had already invested $55 million in the company, and it was teetering towards bankruptcy.
I’ve got so many chips on the table with Tesla. It just made sense for me to have both hands on the wheel.
– Elon Musk
Some of Musk’s first moves:
- He ended up cutting 25% of the workforce
- He leaned on friends to help cover payroll, week-to-week
- He raised a $40 debt financing round to escape bankruptcy
- He formed a strategic partnership with Daimler AG, which acquired a 10% stake of Tesla for $50 million
- He took a $465 million loan from the U.S. Dept. of Energy (He repaid it back ahead of the deadline)
- He recalled 75% of the Roadsters produced between March 2008 and April 2009
Despite revamping the entire production process – and the company itself – Tesla made it through its most trying time.
The Roadster’s Run
The Roadster wasn’t perfect, but it helped Tesla learn what it meant to be a car company.
It is not just a car, but one of the strongest automotive statements on the road.
– Car and Driver
A total of 2,450 units were produced, and the specs were impressive for an EV. With a top speed of 125 mph and a 0-60 mph time of 3.7 seconds, the Roadster helped dispel many of the myths surrounding electric cars.
Meanwhile, the Roadster’s lithium-ion battery also was the first step forward in an entire battery revolution. The 992 lb (450 kg) battery for the Roadster contained 6,831 lithium ion cells arranged into 11 “sheets” connected in series, and gave the car a range of 244 miles.
With the Roadster, Tesla would not only set itself up for future success, but also the transformation of an entire industry.
This was Part 1 of the Tesla Series. Parts 2 and 3, on Tesla as well as the future vision, will be released in the near future!
Visualizing Copper’s Role in the Transition to Clean Energy
A clean energy transition is underway as wind, solar, and batteries take center stage. Here’s how copper plays the critical role in these technologies.
A future powered by renewables is not in the distant horizon, but rather in its early hours.
This new dawn comes from a global awareness of the environmental impacts of the current energy mix, which relies heavily on fossil fuels and their associated greenhouse gas emissions.
Technologies such as wind, solar, and batteries offer renewable and clean alternatives and are leading the way for the transition to clean energy. However, as with every energy transition, there are not only new technologies, but also new material demands.
Copper: A Key Piece of the Puzzle
This energy transition will be mineral intensive and it will require metals such as nickel, lithium, and cobalt. However, one metal stands out as being particularly important, and that is copper.
Today’s infographic comes to us from the Copper Development Association and outlines the special role of copper in renewable power generation, energy storage, and electric vehicles.
The red metal has four key properties that make it ideal for the clean energy transition.
It is these properties that make copper the critical material for wind and solar technology, energy storage, and electric vehicles.
It’s also why, according to ThinkCopper, the generation of electricity from solar and wind uses four to six times more copper than fossil fuel sources.
Copper in Wind
A three-megawatt wind turbine can contain up to 4.7 tons of copper with 53% of that demand coming from the cable and wiring, 24% from the turbine/power generation components, 4% from transformers, and 19% from turbine transformers.
The use of copper significantly increases when going offshore. That’s because onshore wind farms use approximately 7,766 lbs of copper per MW, while an offshore wind installation uses 21,068 lbs of copper per MW.
It is the cabling of the offshore wind farms to connect them to each other and to deliver the power that accounts for the bulk of the copper usage.
Copper in Solar
Solar power systems can contain approximately 5.5 tons of copper per MW. Copper is in the heat exchangers of solar thermal units as well as in the wiring and cabling that transmits the electricity in photovoltaic solar cells.
Navigant Research projects that 262 GW of new solar installations between 2018 and 2027 in North America will require 1.9 billion lbs of copper.
Copper in Energy Storage
There are many ways to store energy, but every method uses copper. For example, a lithium ion battery contains 440 lbs of copper per MW and a flow battery 540 lbs of copper per MW.
Copper wiring and cabling connects renewable power generation with energy storage, while the copper in the switches of transformers help to deliver power at the right voltage.
Across the United States, a total of 5,752 MW of energy capacity has been announced and commissioned.
Copper in Electric Vehicles
Copper is at the heart of the electric vehicle (EV). This is because EVs rely on copper for the motor coil that drives the engine.
The more electric the car, the more copper it needs; a car powered by an internal combustion engine contains roughly 48 lbs, a hybrid needs 88 lbs, and a battery electric vehicle uses 184 lbs.
Additionally, the cabling for charging stations of electric vehicles will be another source of copper demand.
The Copper Future
Advances in technologies create new material demands.
Therefore, it shouldn’t be surprising that the transition to renewables is going to create demand for many minerals – and copper is going to be a critical mineral for the new era of energy.
How Much Oil is in an Electric Vehicle?
It is counterintuitive, but electric vehicles are not possible without oil – these petrochemicals bring down the weight of cars to make EVs possible.
How Much Oil is in an Electric Vehicle?
When most people think about oil and natural gas, the first thing that comes to mind is the gas in the tank of their car. But there is actually much more to oil’s role, than meets the eye…
Oil, along with natural gas, has hundreds of different uses in a modern vehicle through petrochemicals.
Today’s infographic comes to us from American Fuel & Petrochemicals Manufacturers, and covers why oil is a critical material in making the EV revolution possible.
It turns out the many everyday materials we rely on from synthetic rubber to plastics to lubricants all come from petrochemicals.
The use of various polymers and plastics has several advantages for manufacturers and consumers:
- Easy to Shape
- Flame Retardant
Today, plastics can make up to 50% of a vehicle’s volume but only 10% of its weight. These plastics can be as strong as steel, but light enough to save on fuel and still maintain structural integrity.
This was not always the case, as oil’s use has evolved and grown over time.
Not Your Granddaddy’s Caddy
Plastics were not always a critical material in auto manufacturing industry, but over time plastics such as polypropylene and polyurethane became indispensable in the production of cars.
Rolls Royce was one of the first car manufacturers to boast about the use of plastics in its car interior. Over time, plastics have evolved into a critical material for reducing the overall weight of vehicles, allowing for more power and conveniences.
Rolls Royce uses phenol formaldehyde resin in its car interiors
Henry Ford experiments with an “all-plastic” car
About 20 lbs. of plastics is used in the average car
Manufacturers begin using plastic for interior decorations
Headlights, bumpers, fenders and tailgates become plastic
Engineered polymers first appear in semi-structural parts of the vehicle
The average car uses over 1000 plastic parts
Electric Dreams: Petrochemicals for EV Innovation
Plastics and other materials made using petrochemicals make vehicles more efficient by reducing a vehicle’s weight, and this comes at a very reasonable cost.
For every 10% in weight reduction, the fuel economy of a car improves roughly 5% to 7%. EV’s need to achieve weight reductions because the battery packs that power them can weigh over 1000 lbs, requiring more power.
Today, plastics and polymers are used for hundreds of individual parts in an electric vehicle.
Oil and the EV Future
Oil is most known as a source of fuel, but petrochemicals also have many other useful physical properties.
In fact, petrochemicals will play a critical role in the mass adoption of electric vehicles by reducing their weight and improving their ranges and efficiency. In According to IHS Chemical, the average car will use 775 lbs of plastic by 2020.
Although it seems counterintuitive, petrochemicals derived from oil and natural gas make the major advancements by today’s EVs possible – and the continued use of petrochemicals will mean that both EVS and traditional vehicles will become even lighter, faster, and more efficient.
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