Filed under: EV/Plug-in, AutoblogGreen Q & A, Tesla Motors, AutoblogGreen Exclusive, Green Daily
AutoblogGreen Q&A: Tesla Motors Chairman Elon Musk Pt. 1 - In the beginning
Among the readers of this site, one of the cars that elicits a lot of passion is the Tesla Roadster. The battery-powered Roadster and its provenance have elicited a great deal of discussion over the past nine months, in particular since the demotion and ultimately the departure of co-founder Martin Eberhard. This is a complex tale involving passionate entrepreneurs with that all-too-common but in many ways necessary human frailty known as ego. When humans interact, they often see the same results through their own mental filters.People can see exactly the same thing and interpret it in many different ways. Unfortunately in today's media landscape, particularly on television, but also in blogs we often see a very cut-down sound-bite version of things. Sound-bites by definition are taken out of context. In and of themselves they often lead to incorrect or at least inaccurate conclusions.
With all of that in mind I was recently contacted by Tesla Motors Chairman Elon Musk. Musk wanted to discuss his role at Tesla, and hopefully fill in some of the gaps in the story. What follows after the jump is the phone conversion that I had with Musk recently as well as some comments from Martin Eberhard via e-mail exchanges. Eberhard's version of events is italicized.
Update: Just to be clear Elon Musk contacted me immediately after a previous article where I called into question his role in the development of the Roadster. He wanted to clear up what he felt were misconceptions of his role rather than to pitch a story idea about him.
ABG: Why don't we start with how you got involved with Tesla to begin with.
Elon: So, the way I got involved was in 2003, I think it was in September or October, I had a lunch with JB Straubel and Harold Rosen. Harold Rosen was kind of a space guy, Harold had a space background and a car background. He was with Rosen Motors. But before that, he was an engineer at Hughes and he came with a number of innovations for the early geosynchronous satellites. So, he kind of had, like me, a combination of space, and electric car interests. So Harold called me up out of the blue and wanted to have lunch and brought along JB Straubel. And during lunch, he talked about space stuff, and he talked about electric car stuff because I had mentioned the reason I first came out to California was to do a Ph.D. at Stanford in a higher density capacitors to use in electric vehicles. And we talked about lithium ion and what that meant for electric vehicle range. The EV1 had a range of about 120 miles or so with Nickel Metal Hydride and so if you did a direct substitution of lithium ion for nickel metal hydride, which has directly 2x the energy density you get to around a 240-250 mile range, which would be acceptable to people. JB mentioned that there was this company, AC Propulsion, that had actually put together this electric sports car, which did in fact deliver range of that order and acceleration from 0 to 60 under 4 seconds.
So, he offered to introduce me to Tom Gage, the guy from AC Propulsion, which he did, and Tom Gage came by and gave me a test drive with the tZero , I said, "wow, this is really awesome." This is exactly what I thought should be done and I tried to buy one. He wouldn't sell it to me and I said, "Look, you should really go into production with this thing, productize the tZero. But they didn't want to do that. I don't know if you're familiar with AC Propulsion...
ABG: I'm familiar with them and I've talked to Martin previously about AC Propulsion as well.
Elon: Yes, so anyway, I tried at length to get AC Propulsion to at least make me one bloody car, even if they wouldn't go into production with the thing, but they wouldn't do it. I even tried to get them to convert my Porsche to electric, and they wouldn't do that either. And in addition, after bargaining for a bit, Tom Gage said, "Well, you know, we aren't interested in doing that but there are these three guys who are and said, "Do you want to meet Martin (Eberhard), Marc (Tarpenning) and Ian (Wright)." I said, "Sure."
This is actually very similar to the path that Eberhard himself took before launching Tesla. When we spoke to him last year he also discussed being inspired to start Tesla after AC Propulsion declined to produce the tZero. In essence the true stimulus for the creation of the Tesla Roadster might have been Tom Gage and his resistance to following the path that Eberhard and Musk ultimately took.
So Tom gave Martin and Ian my card and they came by SpaceX and gave a presentation. Well, there are a few things that I disagreed in what they showed. I wanted to have a company-owned sales and service infrastructure, they wanted a dealership infrastructure. And I didn't want to be a niche sports car company. I wanted it to be something that would aim for the mass market as soon as possible. So it's a sports car at the intro, but we wouldn't stay there; we'd go mass market as soon as possible.
Those were the two big changes that I had. Apart from that... I said let's move forward and create a production version of the tZero. So I provided essentially, all of the Series A funding. There wasn't any Tesla Motors at that time.
This was in March/April 2004. According to Eberhard, Tesla Motors had been incorporated on July 1, 2003 but it consisted only of himself, Tarpenning and Wright at the time. None were drawing any salary.
It was just basically Martin, Marc and Ian working part-time and a sort of business plan that was a kind of a weak business plan actually. That's all Tesla Motors was when I invested. I provided essentially entire Series A round, over 90 percent of it. There were a few small VC investments and a few small individual investors.
So, to kick things off, that's how things started off with AC Propulsion and basically, from my standpoint, it's started off with a conversation with JB Straubel , who by the way, a few months later called me up and said he's thinking about joining Tesla and had wanted to know if I thought it was a good idea. I said, "Well, definitely because I'm investing in it. So JB joined and became Chief Technology Officer and was really the key guy responsible for developing the differentiated technology.
Eberhard confirms that Straubel was hired as a Drivetrain Engineer about one month after the Series A funding closed and was employee 6 or 7. Straubel contributed to the development of the powertrain from the original AC Propulsion design. Straubel wasn't promoted to Chief Technology Officer until a year later after managing the design and construction of the dynomometer used to test Tesla's powertrain.
ABG: Once you got involved with Tesla, beyond the obvious fund raising role that you've had through the first four series of fund-raising, what else has been your role with Tesla?
Elon: Well, I'll just give you a little more detail on the financing side. I provided essentially all of the series A, about 90 percent of the Series A, about 90 percent of the Series B. I co-led the Series C, co-led the Series D and led most recent round. So I put a total of $55 million. In as far as, non-financial investment... I'm not a venture capitalist. I'm a technologist.
I'm a product design guy. So I'm not running around looking for things to invest in. In fact, if I didn't think that it was extremely important that we accelerate the advent of the electric car, I wouldn't even be bothered with Tesla; this is a huge distraction from my space activity. You know, I put about 25 percent of my time into Tesla and my workweek is about a hundred hours a week so it's somewhere around 25 hours a week that I put into Tesla, on average.
In the last year, it's been closer to 40 hours, 40 to 50 hours trying to correct a lot of problems. But as far as my involvement, Initially, I spent a lot of time on the body design, a lot of time on the product spec and making sure that this would be a compelling car, at a compelling price.
Our biggest fear was that this should become a sort of DeLorean, where you have a car that looks like a sports car but doesn't perform like a sports car. It's got to be something where people say, "You know what, I think it's really worth the money that I'm paying for it, and that I'd buy this even it wasn't an electric car, just based on the objective performance specs."
So, one of the things that Martin mis-characterizes is that I was hugely insistent on a two-speed. This is not the case. I was hugely insistent that the car be a real sports car. The path that I actually wanted to take is the path we're currently taking, which is, upgrade the motor power and have a single speed so that the upgraded motor with a single speed encompasses the performance that we promised people, the 3.9 second 0 to 60, 125-mile an hour top speed. That's the path that we're on right now. That's the path that I always wanted to be on.
Eberhard's version does not vary dramatically here. "He [Musk] did, very early on, push us to make the 2-speed transmission that I had proposed as a model year 2 improvement become a part of the model year 1 spec." Eberhard was prepared to launch the car with a single speed transmission and lower performance much like the current early production cars being built now. Eberhard's plan had been to switch to the 2-speed later rather than increase the power.
ABG: When you first got involved, how far along was the design of the Roadster? Was it anything more than just essentially a spec sheet based on a combination of the specs of the tZero and the Lotus Elise or have they actually gone beyond that at that point?
Elon: Yes, that's it. There wasn't any there, there. I can send you a copy of the business plan.
ABG: I have a copy of the Executive Summary of the business plan
Elon: Which version is it? What's the date?
ABG: There isn't a date on this one but I think it's pretty early up. I got this from Martin and I understand that this is what he first showed you. This one still lists the idea of having high-end sports car dealers sell the car and describes the specs that ultimately became the Roadster. But it was clearly, prior to there being any actual drawings of it. So, I believe this is from sometime in 2003.
Elon: Okay, that sounds about right, that sounds like the original. When I invested, there was no there, there. They didn't even have an office. It was three guys working, it was Martin, Marc and Ian working part time.
According to Eberhard, he, Tarpenning and Wright were working out of an office in Menlo Park but were not drawing any salaries yet.
Elon: So there was zero done on this thing, yes.
This statement appears to be something of an exaggeration. According to Eberhard, "In the business plan, we had worked out the basic dynamics of the car well enough to know that the Elise chassis was up to the job, that the weight of the car, combined with the power of a drive system comparable to that of AC Propulsion would give us the speed and acceleration we sought, etc. All of the early engineering work we did was to prove that the basic idea of the Roadster was feasible - would the drivetrain components fit? Could we fit a large enough battery pack? How big would that battery pack be, what would it weigh, and what would it cost? If increased the weight of the Elise, what would its handling characteristics be? How would that compare to other sports cars?"
So, Eberhard had done some preliminary engineering work, essentially conducting a feasibility study, concluding that the concept was a viable one. A feasibility study is however far from a complete vehicle design.
Coming tomorrow in Part 2: Musk and I discuss the development of the powertrain, particularly the decision to go with a two-speed transmission. We also get some more feedback from Martin Eberhard.
Reader Comments (Page 1 of 3)
meme 9:07PM (6/23/2008)
So, to clarify the main points that neither side seems to be disputing:
1) Basically all Eberhand had done was find out that the concept would work. Musk provided essentially all of the money as well as heading up the actual implementation.
2) Musk wanted to make Roadsters with drivetrain 1.5. Eberhand wanted to make the current crippled-performance Roadsters and make that the final goal (a sports-car priced vehicle without sports-car type specs). Eberhand "compromised" with the two-gear system, which was an utter failure and set the schedule way back.
3) Eberhand didn't want to use the Roadster as a way to nudge into mainstream vehicles. Musk did. I.e., the Whitestar wouldn't have even been on the radar with Eberhand.
Given that Musk has been making what are essentially the right decisions at each step along the way and turned it from a no-name garage company** going nowhere into a company that's actually rolling vehicles off the line, could someone explain why everyone around here insists on treating him like the devil?
** -- Actually, that's not fair. To garage companies; Tesla didn't even have a garage back then!
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Martin Eberhard 10:13PM (6/23/2008)
That's pretty harsh, meme.
There is a significant step that must occur before "finding out that the concept would work." Before that, someone must invent the concept. The concept I invented for Tesla Motors was a radical departure from other EVs, and was very far from obvious in two ways. The first was the idea of making a high-performance production EV (instead of a low-cost punishment car), and the second was powering that EV with commodity lithium ion batteries to get the range, power, and longevity needed. These two innovations may seem obvious today, but they were quite radical in 2003 and 2004.
We are also not in agreement that I wanted to make "a crippled-performance Roadster." Not at all. Our plan from the beginning was to achieve 0-60 acceleration in about 4 seconds - far from crippled performance. Wouldn't it have been great to have shipped a few hundred cars on 2007 - even if these first cars were 0-60 in 4.5 seconds and top speed limited to 110 mph? By 2008, we would be shipping the hot version with sub-4 second 0-60. Sam can confirm this - he has a copy of Tesla's Executive Summary from early 2004.
My plan from the beginning was to follow the Roadster with other, lower priced cars. But I do admit that in early 2004 we had not yet defined or designed those follow-on cars; they were nothing more than a mention in the business plan, as they certainly should be at that point in the company's history. It seemed that with my team of 3, getting the underlying technology and the first car right were our highest priorities!
Elon and I both wanted to push EVs into the mass market as soon as possible. Our real quibble was only with the definition of what was possible. I thought (and still think) that it is the height of hubris to imaging that Tesla Motors will be a "mass market" car company in 2009 (or 2010, or even 2015). Tesla needed to (and still needs to) succeed with the Roadster first. Its second car must be designed also to succeed in a market segment that is realistically achievable - and that is still not "mass market." Does anyone want to bet that Tesla will actually ship one single factory-built Whitestar in 2009?
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LGP 11:03PM (12/18/2008)
Martin,
Why do you persist in arguing with Elon in public? If you truly care for the company you helped found, and you still have money invested in it, why bring on all the bad PR and controversy? Take the high road and just ignore him, and make sure you get a good biographer. We all need Tesla to succeed, not just people who own the company or its product. If we don't succeed in making a technological shift away from big oil/gas the whole species could die out.
Joseph 10:24PM (6/23/2008)
I cannot wait till tommorow. Someone oughta write a book about the Tesla Roadster. Has anyone heard about "The Car that Could" abotu the development of the EV1? Awesome book. Too bad the book was written before the cars were crushed, so the book just ends at the release of the car. No insider info in the who crushing situation.
Anyways, Martine Eberhard made a slideshow a while back about the history of the company. You can see it here
http://www.teslamotors.com/display_data/pressguild.swf
(It seems that they did have an office actually)
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Sam Abuelsamid 10:40PM (6/23/2008)
Meme, I agree with Martin that you are being far too harsh here. No one disputes that Martin's plan went beyond the initial iteration of the Roadster and included higher performance than what was originally expected to be delivered. As you'll see in the next two parts everyone involved learned that building a car is a lot harder than it appears to someone who has never done it. Elon made his share of mistakes too.
Even though WhiteStar is anticipated to be higher volume than the Roadster it is still far from a mainstream car. A $60,000 is still far out of reach for the vast majority of people.
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Doug 10:52PM (6/23/2008)
Thanks for the added info Martin. I do have to ask the obvious question, though. What about your concept was radically different from the tZero or say the Venturi Fetish. I certainly think the Roadster is the best out of the three and love the Lotus connection, but it seems like the concept of an EV sports car powered by Li-ion cells already existed. Curious why ACP was so resistant and never wanted to move forward with the tZero.
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Musk Disgrace 10:52PM (6/23/2008)
Meme, your comments make you sound like you work for Musk, except you misspell Eberhard's name. I think this single statement by Musk says it all:
It was just basically Martin, Marc and Ian working part-time and a sort of business plan that was a kind of a weak business plan actually. That's all Tesla Motors was when I invested.
So what Musk is actually saying is that the company was worthless and he should never have made the investment. Except that all start-ups begin as a business plan - sometimes even written on a napkin. The people (founders) are what build a company, not the money.
This is why no entrepreneur with a truly game-changing concept will ever again trust Elon Musk to invest $0.01 in their venture. By the time Eon Musk became involved three individuals had devoted a year of their lives to building Tesla Motors. Their passion, their motivation, their energy and their hard work are what made Tesla Motors. To Musk that counts for nothing.
Without the founders Tesla Motors never would have existed. Without Elon Musk somebody else would have invested in Tesla, and maybe today at least one of the founders / true visionaries would still play some sort of roll in the company.
Now the megalomaniac Musk has forced Tesla to include his picture with the Tesla Team on their website where he incorrectly boasts "has been involved in key product decisions since the start of Tesla Motors". A blatant lie.
Elon Musk only owns about 36% of the company. Sooner or later the majority of the shareholders are going to realize that it is against their interest to have this narcissist as the Chairman of the company and ask him to step down. He is a disgrace.
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BlackbirdHighway 11:10PM (6/23/2008)
Nice work Sam!
Meme, I'll second that harsh, even though I'm one of those who doesn't really see Elon as the devil.
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Martin Eberhard 11:18PM (6/23/2008)
Doug,
Both the tzero and the Fetish were indeed conceived as performance EVs, and in this sense, Tesla follows in their footsteps. But only Tesla was conceived as a *production* high performance EV. From the beginning, I was obsessed with making the right trade-offs that would deliver sportscar performance, but also meet DOT requirements (like airbags and proven crash performance), cost and schedule targets, quality specs, mass-producibility (there's a word that makes the spell checker barf!), and everything else that makes a production car.
On the battery front, the three cars are more closely related. When I met the dwindling team at AC Propulsion back in 2003, the tzero was a lead-acid car. I personally invested in AC Propulsion to convert their one remaining car into a lithium-ion car.
It seems that Al Cocconi and I had independently come the the conclusion that lithium ion was the way to go. But because of the sudden demise of the Zero Emissions Mandate, they were in serious financial trouble, and could not even build a prototype, let alone make payroll. I funded this program in part to rescue AC Propulsion, but largely to prove lithium ion would work. And I am no rich guy!
And then AC Propulsion built the battery pack (as well as the motor and inverter) for the fetish. So all three cars are cousins, and AC Propulsion deserves a fair amount of credit for their role.
Funny thing - if AC Propulsion had any inclination to build production tzeros, I might well have bought one for myself and never founded Tesla Motors. Heck, I might even have applied for a job there!
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Doug 11:23PM (6/23/2008)
Elon certainly seems eager to publicize his contribution to Tesla. Even going so far as to add “Project Architect" to his job title on the Tesla company team page. In his blurb he makes a special effort to emphasize that he's been very hands on, making large design contributions from the very start of the company.
http://www.teslamotors.com/learn_more/company_team.php
He may say that SpaceX is his main focus (and it is unquestionably a more challenging undertaking), but in terms of his public image, Elon gets much more traction with Tesla Motors, and certainly invests time for the purpose of building that image. This interview (as well as a few others that showed up last week) is evidence of that.
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BlackbirdHighway 11:28PM (6/23/2008)
Doug, I think that ACP was smart enough to realize that just because it had four wheels, a battery pack, and an electric motor, it was still a very long way from being a "50 state legal" automobile. There are so many rules and regulations involved in putting a car on the road in the US that it represents a very high barrier to entry for any startup.
That's why you see so many three wheeled electric vehicles. It's the easiest way around the all the legal requirements.
Tesla had either great luck or wisdom (or both) in basing the car on the Elise platform. It is a very light, high performance chassis that is just about ideal for electric conversion. Of course, what they ended up with was far beyond a conversion, but having that starting point gave them a huge advantage.
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Mike Z 12:17AM (6/24/2008)
I think the bigger issue is that Musk has not gotten the memo on under promising and over delivering.
He seems the type of person schooled in the Silicon Valley style of PR of promising the moon and once you bank all the free media attention, start to revise downwards your targets--usually in a Friday evening press release.
Look at SpaceX for example, they have yet to launch a single commercial payload and are years behind schedule. This is not an attack on Musk, I love SpaceX, but instead to prove the point that innovative startups should solve the hard problems in private so as to avoid slipping so bad on the public stage after building such high expectations.
Mainstreaming electric cars is really the case of long term general dreams getting in the way of strategic planning that requires overcoming a lot of hurdles before you can even consider it.
Incidentally, the most interesting thing I wonder about with Tesla was the debate on a Range extended version. I have a feeling ideology and stubbornness were more a factor in Tesla not developing one than people realize.
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Oliver Burke 12:23AM (6/24/2008)
A book will come out about this - similar to the one about the McLaren F1. Excellent book & car. The human relationships part will settle to being more harmonious, but there'll be a book for sure.
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Serge 12:35AM (6/24/2008)
And a movie perhaps? "Who Borne the Electric Car?"
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Serge 12:37AM (6/24/2008)
And a movie, perhaps? "Who Borne the Electric Car ...?"
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Martin Eberhard 12:40AM (6/24/2008)
Mike Z,
As Tesla Motors has reported elsewhere, the Whitestar is intended to be a range-extended EV. As Darryl Siry has commented elsewhere, it was actually my idea to make it so, and this is something that has not changed since my departure, so far as I know.
I thought long and hard about how to meet the price and performance specs for Whitestar, and like GM, I concluded that today, a range-extender makes sense. (See my blog on this subject: http://teslafounders.wordpress.com/2008/01/14/getting-from-here-to-there/.)
I pitched this idea first to Tesla's executive staff (which led to a lively debate), then to Elon (who agreed almost immediately), and then to the Board of Directors (which lead to an even more lively debate.) Finally, with more or less blessings from the above, I pitched the idea to the whole company in an open meeting back in the shop - and as you might imagine, we had ourselves quite the debate.
The primary cause of disagreement was the obvious: we are the purist EV company. The minute we put a gas tank on the car, our pure position is soiled. On the other hand, a range-extended version of the car makes a car with acceptable driving range possible at a much lower cost. Both positions are very reasonable, and all the debates we had were healthy.
The Roadster has no range-extended version available largely because there simply is no place in that little car to squeeze in a generator!
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Doug 12:52AM (6/24/2008)
Thanks Martin and BBH for your clear and informative responses. Sam, looking forward to part 2 (and 3?!?).
With regard to Whitestar, I'm still hoping that Tesla will make a pure EV version available.
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Lad 1:07AM (6/24/2008)
I think we are seeing a war of egos here. To me I don't give a rat's a$$ who did what when. I'm interested in what both of these men contributed to forming the first company to put a feasible electric car on the roads of our country and igniting the EV industries. Both should be congratulated for this major accomplishment. TMC's former and present major players would do well to keep their disappointments and differences confidential for the good of the company. No one wants to buy products from a new company with the least bit of a hint of instability . One wonders how much these disputes have damaged the brand already!
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simon 1:44AM (6/24/2008)
hey meme - did you read any of tesla's press or blogs while martin was ceo? its clear that he was running implementation not musk.
look at the reason musk gave for firing martin - unspecified operational problems, cost problems, transmission implementation issues (depending on which version of musks story). seems like even musk admits martin was in charge of implementation!!
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Mik_Cal 2:10AM (6/24/2008)
Actually, Lad, there are important principles called "ethics" that are being discussed here. Without ethics you cannot have contracts, found companies, reward innovators fairly, etc.
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