IEEE Spectrum breed · Technology

Tesla's Origins: From tZero Demos to Roadster Challenges

Early demonstrations of the tZero electric car showcased its performance, attracting Elon Musk and leading to Tesla's founding. The company then faced significant manufacturing and technical hurdles in developing the Roadster.

Martin Eberhard used the tZero electric roadster for investor demos in 2003, impressing VCs with its acceleration. This led to Elon Musk's involvement after Google co-founders suggested him.

In 2004, Tom Gage of AC Propulsion offered Musk a tZero drive. Musk, interested in performance, rejected Gage's eBox concept and was directed to Eberhard and Tesla.

Musk invested $6.35 million in Tesla, becoming chairman. The startup planned to use Lotus Elise chassis and license AC Propulsion's drivetrain.

Tesla faced issues with unreliable controllers and a dangerous battery pack that caught fire during testing.

The company brought battery pack manufacturing in-house, redesigning and automating the process, moving away from outsourcing.

Supply chain problems, especially with battery assembly in Thailand, highlighted the need for vertical integration.

Tesla adopted a Henry Ford-like model, bringing manufacturing in-house to control production and ensure survival.

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