Company Background

 Tesla was founded in 2003 by a group of engineers that wanted to show electric cars are better (performance wise as well as for the environment) than traditional cars. Tesla was solely focused on developing electric vehicles efficiently. Their co-founder, Elon Musk invested $37 million into his company to get the ball rolling more rapidly. Shortly thereafter, development of their first product was underway and was dubbed “Tesla Roadster.” With the assistance of car manufacturer Lotus, the shell of the car was borrowed from them to cut costs on R&D. The car was groundbreaking tech as it was later awarded TIME magazine’s “best invention of 2006.” Few months went by as Musk realized the car was not profitable and in fact, they were losing $50,000 per vehicle sold. The Roadster was also sought out to be unsafe as it failed to meet safety requirements upon further investigation by Musk. Displeased by the overall performance of engineering, Martin Eberhard was fired and Musk took development into his own hands. Aside from the body, the car was completely redesigned to meet safety regulations as well as being somewhat profitable. By 2010, the second version of the Roadster had sold close to 1,000 units across 18 countries and by 2012, 2500 Roadsters were sold. Realizing that the demand for a hundred thousand dollar sports car was only going to be so high, Tesla decided to release the Tesla Model S in 2012 which was a mid size sedan after discontinuing the Roadster. Tesla would acquire a factory from Toyota in Fremont, California for $42 million and this is where production would take place. Priced at $52,000, the Model S went from 0-60 in 4.4 seconds and had a battery range of 300 miles. With its sleek and Italian like front fascia and luxurious interior, consumers were blown away at the value of the Model S as it won Motor Trends Car of the Year in 2013. After going public in 2010 where share price was at $23 dollars, after the success of the Model S, share prices went as high as $150 per signaling things were looking bright for the company.