Power Play Tesla, Elon Musk, and the Bet of the Century - Tim Higgins

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Here is a summary of the copyright notice and contents:

• This book is copyright 2021 by Tim Higgins. All rights are reserved. It was published by Doubleday, a division of Penguin Random House.

• The book is about Tesla, Elon Musk, and their bets to disrupt the automotive industry.

• It has three parts: Part I covers Tesla’s early years developing expensive electric cars. Part II focuses on the Model S and Tesla’s growth. Part III is about Tesla’s efforts to produce an affordable mass market electric car, the Model 3, and the challenges of ramping up large-scale production.

• The prologue sets up Musk’s historic 2016 unveiling of the Model 3, his goal of an affordable $35,000 electric car for the masses. It highlights the financial challenges Tesla faced and Musk’s need to rapidly scale production to succeed against well-established automakers.

• The book includes acknowledgments and notes sections at the end. The author is journalist Tim Higgins.

• Tesla was working to ramp up mass production of the Model 3 sedan, which it sees as key to its future success in making electric cars affordable for the masses.

• Musk had been sleeping at the factory to address problems on the assembly line where parts were being added, like seats and batteries. Production was plagued by issues meeting the complex requirements of 10,000 parts from hundreds of suppliers.

• Tesla teetered on the verge of bankruptcy as it struggled with production delays over a year behind schedule. Musk was unshaven and wore the same clothes for days as he worked to solve the problems.

• Challenging the huge, entrenched auto industry is an enormous task. Tesla must achieve massive scale to be profitable given narrow profit margins. Its future depends on the Model 3 succeeding in cracking the mass market.

• Musk aims to make Tesla the leader in the electric car revolution as competitors rush to catch up. But Tesla must operate by the same financial rules and each new model brings high risks of failure that could doom the company. Musk’s determination drives Tesla but his volatile personality also threatens its success. The ultimate question is whether Musk can succeed in upending the auto industry or if his ambitions will be Tesla’s undoing.

The passage introduces Jeffrey Brian Straubel, an engineer obsessed with batteries and electric vehicles. As a student at Stanford, he interned at Rosen Motors, an early electric car startup that ultimately failed. This sparked Straubel’s desire to create an EV that could succeed commercially.

After graduating, Straubel hosted Stanford’s solar-powered car team. Late one night, he and Gene Berdichevsky discussed using lithium-ion batteries instead of solar to create a long-range electric car. They calculated they could achieve a 2,500 mile range with the right battery setup. Energized by this idea, Straubel wanted to start a company to build such a vehicle, hoping to generate widespread interest in EVs.

The passage establishes Straubel’s lifelong passion for renewable energy and tinkering with batteries/vehicles. It sets up his catalyst experience at Rosen Motors and subsequent realization, during that late night discussion, that lithium-ion batteries could enable a commercially viable long-range electric car - a dream he was determined to pursue.

• Alan Cocconi was an engineer who worked on GM’s failed electric car, the EV1. In 1996, he started a shop called AC Propulsion to create excitement around electric cars.

• AC Propulsion built a prototype electric car called the tzero, which could accelerate faster than supercars and beat sports cars in drag races. However, by 2002 the business was struggling as carmakers lost interest in electric vehicles.

• JB Straubel met Cocconi and was interested in the tzero. He proposed converting it to use lithium-ion batteries to build a long-range prototype. Cocconi liked the idea but couldn’t afford to hire Straubel.

• Straubel then met Elon Musk and pitched him on the idea of an electric car that could cross the country. Musk agreed to invest $10,000 and get in touch with AC Propulsion. This caught their interest in potentially partnering with Musk.

• The chapter sets up how Straubel and Musk’s interests in electric vehicles intersected through AC Propulsion and their prototypes like the tzero, leading Musk to get involved and help enable the creation of Tesla motors. Cocconi and his work at AC Propulsion played an important early role in developing electric vehicle technology.

• Martin Eberhard was intrigued by the idea of an electric vehicle after researching their efficiency and potential environmental benefits. However, existing electric cars like the EV1 didn’t meet his needs as a sports car enthusiast.

• He visited AC Propulsion and was impressed by their prototype electric car, the tzero, but it still had range and performance limitations due to its heavy lead-acid batteries.

• Eberhard proposed using lighter lithium-ion batteries instead, which AC Propulsion had also been exploring. He agreed to fund converting the tzero to lithium-ion in exchange for owning the car, hoping to help turn AC Propulsion into a real electric car company.

• Eberhard saw an opportunity to address the range and cost issues holding back electric vehicles by targeting high-end customers willing to pay more for new technology, rather than trying to compete directly with gas cars in mass markets. This would help drive down battery costs over time for broader adoption.

• Eberhard saw an opportunity to build an electric sports car targeted at wealthy early adopters, taking inspiration from the popularity of the Toyota Prius hybrid among Hollywood celebrities.

• He co-founded Tesla Motors with Martin Eberhard in 2003 with the goal of building a high-end electric sports car. They knew little about the auto industry but saw it as advantageous.

• Eberhard commissioned AC Propulsion to convert one of their tzero EV prototypes using new lithium-ion batteries. The results impressed Eberhard and a test driver, bolstering his idea for a sports car.

• However, neither Tesla nor AC Propulsion had the funds to fully develop a car. Eberhard and Gage agreed to pursue different investors to avoid competing for the same funds.

• Elon Musk’s name came up as a potential investor. He was interested in hearing more from Eberhard about Tesla’s activities after being unconvinced by AC Propulsion’s business model.

So in summary, the passage outlines Eberhard’s inspiration and early steps in co-founding Tesla Motors, including prototyping an electric sports car and seeking investors like Musk to help develop it into a production vehicle.

Here is a summary of key points:

• JB Straubel had collected dozens of electric motors from GM’s discontinued EV1 electric car program, out of curiosity about the technology.

• In 2003, he moved to Silicon Valley with $10k of Elon Musk’s investment to build a prototype long-range electric car using lithium-ion battery technology.

• In 2004, he was surprised to learn that Musk had also invested millions in a new electric car startup called Tesla Motors, located near his home.

• Tesla founders Martin Eberhard, Marc Tarpenning and Ian Wright were looking to hire people to help make their dream of an electric sports car a reality, as they had limited car-building experience.

• Tesla’s initial challenge was to create a prototype (“mule”) vehicle by marrying a Lotus chassis with an AC Propulsion electric motor, powered by lithium-ion laptop battery packs, to prove the concept before full production.

• Straubel was interested in the job and joined Tesla to help with their efforts to build that first prototype electric vehicle.

• Tesla was working to build a “mule” vehicle by converting a Lotus Elise sports car to electric power. This would prove they could successfully electrify the car and help raise funding to build an actual production model.

• JB Straubel joined Tesla after meeting with Martin Eberhard. He helped lead the technical work, reverse engineering AC Propulsion’s technology and overseeing battery development.

• Building the mule proved challenging. AC Propulsion’s motors weren’t uniform enough for mass production. Making the battery pack also took more work than expected.

• Tesla moved operations to California to be closer to suppliers and contractors. Straubel’s home became an unofficial office and workshop.

• There was internal tension, particularly between Eberhard and Zachary Wright over management and technical issues. Eventually Wright was fired at Elon Musk’s behest.

• The team successfully converted the Elise mule to electric power. Its test drive performance, with impressive acceleration but silence, convinced the team Tesla could succeed. This was a key milestone after many technical challenges.

• Tesla had developed a mule prototype vehicle to test their electric powertrain system. This was an important milestone that would help them raise more funding from investors.

• Tesla raised $13 million in their second round of funding, with Elon Musk contributing a large portion. A new investor, Antonio Gracias, also joined and became one of the largest investors aside from Musk.

• JB Straubel was promoted to CTO in recognition of his engineering efforts.

• However, a major problem soon emerged that threatened the company. LG Chem, their battery supplier, demanded Tesla return the batteries it had supplied. This was due to safety concerns around lithium-ion batteries catching fire.

• Straubel and others conducted experiments and discovered that if one battery cell overheated in a tightly packed battery pack like the one needed for a vehicle, it could cause a dangerous chain reaction of fires. This posed a major risk if not solved.

• Tesla assembled a team to focus solely on finding a solution to contain battery overheating and prevent fires. Through extensive testing, Straubel helped develop a battery cooling and packaging system that could contain fires and allow the project to continue. However, battery suppliers were still hesitant to work with Tesla due to the risks.

• Elon Musk met his future wife Justine Wilson while they were students at Queen’s University in Canada. They eventually married after Musk found success with his first company Zip2.

• Musk dreamed big from an early age, wanting to appear on the cover of Rolling Stone magazine. He rolled most of his money from Zip2 into the company X.com, which merged to form PayPal. However, Musk was later ousted as CEO of PayPal.

• After nearly dying from malaria in South Africa, Musk moved to LA with his wife to start SpaceX and pursue reducing the cost of space travel. He also encouraged his cousins to start a solar panel company that would work well with his vision for Tesla.

• As Tesla made progress on their first prototype vehicle (the “mule”), Musk outlined his “Secret Tesla Master Plan” - starting with an expensive sports car, then moving to a luxury sedan, and ultimately a more affordable mass market car. This updated Tesla’s business plan and helped attract more investors.

• Musk wanted Tesla to control the vehicle buying experience, unlike the traditional dealer franchise model. The dealer system benefits automakers but places financial burden on dealers. Musk sought advice from a longtime car dealer on alternatives.

• Elon Musk and Martin Eberhard shared a similar background as startup founders, though Musk attained greater success. They both believed in electric cars.

• In the early days, Musk praised Eberhard’s work and they had a good working relationship. Musk was hands-on, sharing ideas and pushing engineering decisions like using carbon fiber over fiberglass for the Roadster body.

• However, their working styles and personalities - both stubborn and demanding - would eventually doom their working relationship as Tesla grew. While Musk was often hands-off in the early days, attending only board meetings, his input and ideas pushed the engineering boundaries but also challenged Eberhard’s leadership.

• Eberhard initially saw Musk as the “perfect investor” but tensions would emerge between Musk’s bolder vision and Eberhard’s role as CEO running the day-to-day operations as the challenges of developing the Roadster increased.

• Martin Eberhard was the CEO and co-founder of Tesla. He was passionate about the company’s mission to build an electric sports car, the Roadster.

• In 2006, as Tesla prepared to reveal the Roadster prototype, issues with the transmission design caused uncertainty around the production timeline and pricing. Eberhard wanted to be vague about pricing, but Elon Musk wanted to quote a firm $85k price.

• Tesla had been operating secretly for 3 years. They planned to reveal the Roadster prototype to the public and take pre-orders to demonstrate demand and support from suppliers.

• Elon Musk wanted to reveal the car at a party he planned and hosted. He was very involved in the details and marketing around the event.

• The July 2006 event was a success. Over 350 guests saw and test drove the prototype vehicles. The real star was Eberhard’s passion for the company’s mission as he introduced the car. Engineers explained the new electric vehicle technology to guests. The goal was to generate pre-orders and deposits from the wealthy attendees.

• JB Straubel took California Governor Schwarzenegger for a test drive of Tesla’s new electric sports car prototype. The car accelerated very quickly, leaving a dust cloud behind, impressing the governor.

• At a launch party, the car’s performance convinced 20 people to place $100,000 deposits for a reservation, helping fund further vehicle development. Musk laid out his vision for Tesla to eventually produce lower-cost electric vehicles and provide solar-generated electricity.

• The successful launch brought Tesla scrutiny over concerns about the company’s financial viability. Musk assured potential customers the cars would become collectors’ items. However, tensions grew between Musk and CEO Eberhard over Musk’s increasing demands for changes and Eberhard’s concerns about delays and costs.

• By the end of 2006, estimated production costs had risen significantly. Challenges remained around finalizing parts suppliers and bringing battery costs down. Eberhard was under great stress trying to balance Musk’s vision with the realities of getting the car to market.

• Antonio Gracias was an entrepreneur who built a business acquiring small manufacturing factories in the late 1990s.

• In 1999, he visited one of his newly acquired factories in Delémont, Switzerland accompanied by the plant manager and an engineering consultant named Tim Watkins.

• Gracias and Watkins connected over their similar views on management and technology.

• Gracias had an unusual path to manufacturing - he grew up helping in his mother’s lingerie shop and studied law but was drawn to business. He started his own investment firm while in law school.

• His first acquisition was an electroplating company that was struggling but had potential. Gracias worked on the factory floor to improve production. The business became very successful.

• Through subsequent acquisitions, Gracias gained experience turning around small manufacturing plants. This experience would later help him advise Tesla.

• At the factory visit in Delémont, Gracias was surprised to find the plant running fully automated late on a Saturday, defying local labor laws, due to Watkins’ efforts to improve operations.

• Elon Musk was worried about issues at Tesla in 2007 and called on his friend Antonio Gracias for help. Gracias had extensive experience improving factories through automation and operational efficiencies.

• Gracias had previously recruited an innovator named Allan Watkins to improve factory operations through automation. This led to Gracias and his partners selling their portfolio companies for a ninefold return.

• Musk wanted Gracias and Watkins to do a deep dive into Tesla’s operations and finances to identify what was really wrong. Gracias had also joined Tesla’s board that year.

• Martin Eberhard, Tesla’s founder, was struggling to manage the growing company and the Model S program in particular. Musk and Eberhard began discussing bringing in a new CEO and CFO to replace Eberhard and allow him to focus on product development.

• Musk was unhappy with the Detroit-based Model S team’s focus on cost cutting over quality. He pushed for a higher quality vehicle. Gracias and Watkins would help evaluate the financial and operational issues Musk was worried about.

• Martin Eberhard was demoted from CEO of Tesla and replaced by Michael Marks, who had experience running a large electronics manufacturer.

• Eberhard, Marks, and JB Straubel took a chartered jet to Detroit shortly after the leadership change. Marks came across as more experienced and ready to tackle Tesla’s challenges.

• When Marks first arrived at Tesla, he noticed a lack of urgency and hustle among the staff. He held a company meeting to chastise them on this point.

• Tim Watkins, an expert dispatched by board member Steve Jurvetson, conducted an initial analysis of Tesla’s finances and production plans. He painted a much bleaker picture than Tesla’s own estimates, estimating per-vehicle costs of $120k-$150k.

• Watkins’ findings helped seal Eberhard’s fate, as the board was shocked by how unsteady Tesla’s plans and estimates had been. Musk informed Eberhard he was being replaced on August 7th.

• The leadership change brought in Marks as a more seasoned auto industry operator, but Tesla still faced major challenges in getting the Roadster to production given the significant costs and delays uncovered by Watkins’ analysis.

• The Roadster launch was delayed 6 months to address issues and cut costs. Martin Eberhard was demoted from CEO to president, causing tensions with Marc Tarpenning.

• The Tesla team visited GM CEO Rick Wagoner for advice on transmission issues. Wagoner noted GM had transmission problems for 80 years.

• At GM HQ, Straubel was surprised by the luxurious facilities and automaker’s confidence despite struggles. Tesla faced a massive competitor.

• GM VP Bob Lutz was impressed by Tesla’s Roadster and pushed GM to make the Chevrolet Volt electric car. GM saw Toyota as a stronger enemy than Tesla.

• Tesla hired Fisker Coachbuild to design the Model S sedan, but their designs disappointed Tesla. Musk pushed for a sleeker design inspired by sports cars. Conflicts emerged over the Model S design and whether it should be electric-only or a plug-in hybrid.

• Henrik Fisker presented Tesla’s Model S prototype design, which had a raised roofline to accommodate batteries, giving it an unflattering “bulging” or “pear-shaped” look. Musk was angered by the design.

• Tesla realized it couldn’t afford to develop the Model S on its own. It approached Chrysler about a partnership but Chrysler pulled out due to its own financial troubles.

• Tesla was shocked to learn that Fisker, which had been working on the Model S design, planned to develop its own competing hybrid electric vehicle. Fisker had not disclosed this conflict of interest.

• Martin Eberhard, Tesla’s co-founder and original CEO, was forced out of the company by Musk in late 2007. Musk had grown increasingly controlling of Tesla through financing rounds that increased his board seats and power over decisions.

• Tesla went through leadership changes with Marks and then Ze’ev Drori as CEO, while cutting costs by removing people loyal to Eberhard. Musk consolidated his control over Tesla.

• Eberhard was pushed out of Tesla as CEO and signed a non-disparagement agreement. He felt unhappy with how he was treated in the transition.

• Tarpenning, another co-founder, also left Tesla around this time. Many of Eberhard’s allies felt Tesla wasn’t as fun without him.

• Drori became CEO but Musk was clearly trying to take control. On a flight to Detroit, Musk was obsessed with getting the situation under control as he had personally invested in Tesla’s promises.

• Securing battery suppliers was a major challenge. Straubel struggled to find partnerships in Asia. Panasonic rejected Tesla at first.

• Kurt Kelty, who Straubel hired away from Panasonic, proved invaluable in navigating Japanese business culture and relationships. He helped Tesla eventually broker a deal with Sanyo.

• Straubel was growing tired from the constant travel and challenges. He questioned if Tesla would survive like his previous startup that ran out of money. After a trip to Japan, he returned home to a dark house with rotting food, exhausted from keeping Tesla afloat. The company’s future remained uncertain.

• Tesla was facing financial issues and needed to raise more money to fix issues with its supply chain before ramping up Roadster production scheduled for late 2008. The board decided to raise convertible debt instead of taking on more investors. Musk had personally invested $55 million of the $145 million raised so far.

• With some improvements to the Roadster and plans to get deposits from European buyers, Tesla hoped to use the success of the Roadster to raise more funds in late 2008 and go public in 2009.

• New CEO Drori and Musk brought in experienced automotive executives like Deepak Ahuja as CFO and Franz von Holzhausen to oversee design.

• They hired Mike Donoughe away from Chrysler as EVP of vehicle engineering and manufacturing to help get the Roadster into higher production. Donoughe focused on cutting costs and increasing accountability.

• The Roadster design deviated significantly from the original Lotus parts due to the battery pack and motor. Suppliers like the transmission continued causing delays. BorgWarner was eventually engaged alongside Ricardo to develop the transmission.

• Donoughe and other “traditional car guys” thought focusing on the future Model S was a distraction until the Roadster issues were resolved to avoid risking the company.

• In fall 2008, Lehman Brothers collapsed, sending the global financial system into crisis. Credit markets froze and the auto industry was in trouble.

• This put Tesla’s financing deal with Goldman Sachs in jeopardy. Goldman stopped responding to Musk’s calls.

• Goldman eventually offered to put in money but at a valuation so low that Musk refused.

• Musk called a meeting and announced he would have to put more of his own money in. He also decided to oust the current CEO, Ze’ev Drori, and appoint himself as the new CEO - the 4th in about a year.

• The financial crisis posed an existential threat to Tesla but Musk was determined to see it through, even if it meant sacrificing more of his personal wealth. This further demonstrated his deep commitment to Tesla’s mission despite the many challenges.

• Tesla was facing a severe cash crunch in late 2008 during the financial crisis. It had less than $9M in cash and had spent through deposits for the Roadster.

• Elon Musk decided the company needed to cut staff by 25% and take deposits for the upcoming Model S to buy more time. This was a risky gamble that depended on executing their plan seamlessly.

• The head of sales pushed back, saying it was unethical to take Model S deposits without plans to build it. Musk replied they had no choice if they wanted to survive.

• After cuts, Musk revealed the dire cash situation to remaining staff. This leaked and alarmed depositors. Musk wanted to identify the leaker.

• Their largest investor, VantagePoint, was unhappy with Musk and the direction of the company. They debated whether Tesla should focus on becoming a full automaker or a parts supplier.

• With just 3 weeks of cash left, Musk had to cover expenses personally. He showed an early Model S design to an investor who wrote checks on the spot, helping keep Tesla afloat a bit longer.

• As the funding round neared close, VantagePoint did not sign final papers, suggesting to Musk they disagreed on valuations, further threatening Tesla’s survival during this close call.

• Tesla was running low on cash and would miss payroll the next week without more funding. Musk and Salzman, a major investor, had a battle of wills over control of the company.

• Musk borrowed $20 million from SpaceX to keep Tesla afloat and avoid bankruptcy. He also convinced other investors to match his investment. This closed just before Christmas and Musk broke down in tears from the stress.

• Tesla had to raise prices on the Roadster, upsetting some customers. However, many like billionaire Larry Ellison supported it to help Tesla’s finances. Musk also held town halls to address customer concerns about delays.

• Work began on the Model S prototype, retrofitting a Mercedes chassis. It was unveiled to positive reactions in March 2009. Musk promised it could seat 5 adults comfortably with a large interior, touchscreen, and superior performance over gas vehicles. However, skeptics doubted his vision for an affordable mass-market electric car.

• In summary, Musk took bold financial risks and gambles to keep Tesla alive in 2008-2009 during the recession through securing new investments and price increases, while also unveiling an ambitious prototype for the future Model S sedan. But doubts remained about accomplishing large-scale electric vehicle production.

• Elon Musk has long dreamed of starting a car company and had previously hand-built his own roadsters. In early 2009, as Tesla’s CEO, he was balancing delivering the Roadster, building a team for the Model S, and finding funding.

• He met with Franz von Holzhausen, Tesla’s new car designer, and Ian Rawlinson, an experienced automotive engineer. Musk was skeptical of another recent hire and wanted a chief engineer to execute von Holzhausen’s designs.

• Rawlinson had experience cutting development time using computers and smaller teams. He was frustrated by large auto companies’ bureaucracy and inefficiencies. At Tesla, Musk wanted to avoid those issues and develop the Model S faster than traditional automakers.

• Over dinner, Rawlinson and Musk discussed car engineering and designs. Musk’s goal was for the Model S to be the best car that happened to be electric. Rawlinson estimated needing only 20-45 engineers by Christmas, compared to other proposals for over 1,000 engineers. Musk was intrigued by Rawlinson’s lean approach.

• Rawlinson meets with Musk and critiques the progress on the Model S so far, saying the program needs to be restarted from scratch. Musk agrees, surprising Rawlinson.

• Rawlinson begins to see his role at Tesla as more than a typical short-term assignment. He is determined to make the best electric car possible.

• Rawlinson’s arrival threatens Donoughe, who had been leading Model S development. Donoughe sees the writing on the wall and exits gracefully.

• Daimler/MBTech lobby Musk to use their existing Mercedes platform for the Model S instead of designing a new one. Rawlinson argues they need a new platform designed around the battery pack.

• After Rawlinson convinces MBTech his approach is better, the decision is made to design the Model S from scratch with Rawlinson leading it. This was a major departure from traditional automaker processes.

• Justine Musk files to add Tesla and Elon’s other companies to their divorce proceedings, seeking more than just their original prenup agreement valued at $20 million. This threatens to complicate the divorce.

• Elon Musk and his first wife Justine divorced in 2008 after struggling with the death of their first child and parenting multiples. She felt secondary to his work at Tesla and SpaceX.

• Musk fought to keep Tesla separate from the divorce proceedings for fear it could negatively impact the company.

• Around this time, the US government was considering bankruptcy for GM to restructure. Tesla lobbied for inclusion in a DOE green tech loan program.

• Tesla showed their Model S prototype to DOE officials to help their loan application. The publicity also helped market the upcoming Model S.

• Musk realized he needed partners and approached Daimler, who was interested in Tesla’s batteries for electric vehicles. Tesla quickly converted a Smart car to impress Daimler.

• In 2009, Daimler invested $50M in Tesla and the DOE announced Tesla would receive a conditional loan, helping publicity but the deal wasn’t finalized.

• Meanwhile, Martin Eberhard, Tesla’s original CEO who had been ousted, was publicly venting his frustrations about changes at Tesla on his blog until asked to stop.

• Deepak Ahuja had experience as CFO of Ford and other companies, but Tesla presented new challenges of a startup. He worked to cut costs as Musk funded the company personally.

• By mid-2009, an IPO seemed doubtful due to the poor auto market. However, the successful IPO of battery company A123 in September gave Tesla’s finance team some confidence they could pull it off.

• Ahuja had to learn the Wall Street side having worked at Ford, and bankers said Tesla faced challenges - the effect of Musk’s contentious divorce, doubts about an American EV startup, and the weak auto market. However, the A123 IPO provided an encouraging data point as they prepared for their own road show to pitch investors.

• Tesla was struggling to find a factory to produce the Model S, which was key to their plans and financial projections in their upcoming IPO. They had considered sites in New Mexico and San Jose but those efforts failed.

• Elon Musk found a former NASA facility in Downey, CA that could work, but it would need extensive renovations and permitting which some executives worried could take years.

• An alternative was a former GM-Toyota factory in Fremont, CA that was being shut down. Tesla suspected Toyota may want to offload it as they consolidated US operations in Texas.

• After various negotiations, Toyota CEO Akio Toyoda personally met with Musk and agreed not only to sell Tesla the factory, but also invest in the company. This was a major endorsement right before the IPO.

• However, the deal surprised city officials in Downey who thought Tesla was coming to their city. And it killed potential deal talks with Volkswagen when they found out at the same time.

• As Tesla’s largest shareholder with 20% ownership, Musk had significant control over the company and could block shareholder initiatives that required over 85% approval. He was also contractually ensured to remain CEO through 2012 per an agreement with Daimler.

• Weeks after filing for their IPO, Tesla suffered a tragedy when three engineers died in a plane crash on their way to meetings. Further, Musk’s personal finances were in question due to an ongoing divorce proceeding where his then-wife Justine claimed he was living off loans.

• Musk and Tesla’s bankers did roadshows to pitch investors on the IPO. Musk insisted on pricing the stock higher than the bankers’ recommendation of $15, ultimately getting it priced at $17 which raised $226M. On the IPO day, Tesla shares rose 41% with Musk ringing the opening bell.

So in summary, it outlines some of the control Musk had as majority shareholder, tragedies facing Tesla, the roadshow efforts to woo investors for the IPO, and the successful outcome of the IPO with Tesla shares rising significantly.

• In 2010, Tesla was struggling to sell the remaining 1,500 Roadsters from its initial production run of 2,500 vehicles. Sales had slowed significantly after the initial wave of early adopters.

• Antonio Gracias and Tim Watkins from Valor proposed focusing on test drive events to generate sales, rather than opening more retail stores. They believed the test drive was key to creating an emotional connection and closing the sale.

• Gracias and Watkins hired a team of young salespeople to follow up on leads and host test drive events around the country on weekends. The salespeople were trained to focus on engineering details rather than traditional sales tactics.

• This approach worked well, tripling Tesla’s quarterly sales bookings. However, it was still a temporary solution, as Tesla would need a proper retail network to sell more vehicles going forward, especially the upcoming Model S.

• Elon Musk was impressed by Apple’s successful retail strategy and asked his assistant to find the person responsible for Apple’s stores to help Tesla develop its own retail network.

• Blankenship was initially seen as not being ready for a store manager role at his previous company due to spending too much time helping customers rather than cleaning the store. However, his sales numbers proved otherwise and he was successful as a store manager.

• He then moved into real estate roles with expansion success. He later worked at Apple helping design their iconic stores before the iPod launch.

• Musk recruited Blankenship to help design and expand Tesla’s store presence as they prepared to launch the Model S in 2012. Blankenship saw potential similarities to early Apple.

• Blankenship aimed to educate customers in a comfortable environment rather than confrontational car dealerships. He focused on locating stores in malls to reach more customers.

• Blankenship opened Tesla’s first new generation stores in California to great foot traffic success. He aimed to revolutionize the car buying experience by putting the customer in control of their vehicle design.

• One of Blankenship’s next challenges was opening stores in Texas, which banned direct car sales, so Tesla needed to find a workaround within the law.

• Peter Rawlinson was overseeing development of the Tesla Model S and was under strain from long hours and health issues as he pushed the project forward.

• At the 2011 Detroit auto show, Rawlinson gave a press conference to reveal details of the Model S vehicle platform and engineering approaches, emphasizing safety and efficiency gains over traditional automakers.

• Building the right team was Rawlinson’s biggest challenge. He personally interviewed hundreds of applicants and ultimately hired over 100 people for relatively low salaries compared to other tech companies.

• Recruiters had to better prepare candidates for Elon Musk’s high-bar interviews, as he quickly rejected those who disagreed with design decisions already made, like using aluminum for the Model S body structure.

• Recruiters pitched the opportunity to work on an ambitious growth project and the potential for Tesla’s stock price to rise dramatically, though it was still trading around $25 per share at the time compared to its $50 IPO price. Strong belief in the mission and vision helped attract top talent.

• Elon Musk subscribed to an approach called “first principles thinking” which involved breaking problems down to their most basic elements and assumptions, rather than following existing approaches.

• He emphasized rapid decision making over slower decision making with slightly fewer mistakes. Engineers had to quickly justify expenses to Musk.

• Musk was highly involved and engaged with the engineering team, offering opinions on design decisions like vehicle suspension characteristics.

• He dismissed plans to prioritize vehicle features based on market research, wanting to excel at everything rather than make tradeoffs.

• Cultural differences emerged in the collaboration between Tesla and Toyota to develop an electric RAV4, as the teams had differing expectations for their roles and Toyota was unaccustomed to Tesla’s agile engineering process. It took time to align expectations and work together effectively.

• Meanwhile, Kurt Kelty’s persistence opened doors with Panasonic, who eventually agreed to supply battery cells and invest in Tesla, a major breakthrough for the company.

• Tesla was developing its next vehicle, the Model X SUV, to share the Model S platform and help increase production volumes. Elon Musk played a big role in the design, wanting features like rear-opening “falcon wing” doors for easy access to the third row.

• Tesla was still struggling financially and under pressure to deliver the Model S. Engineers were running extensive simulations and late-night wind tunnel tests to refine aerodynamics and save costs.

• Crash tests of early Model S prototypes revealed structural issues that required redesigns, adding time and money. Rawlinson, as head of vehicle engineering, faced increasing frustration from Musk over delays.

• Rawlinson’s relationship with Musk was deteriorating under the stress. Musk was loud and aggressive when confronting Rawlinson about problems. Rawlinson was also dealing with family health issues abroad.

• Both Musk and Rawlinson had personal troubles at home adding to the pressures they faced at Tesla during this challenging developmental phase of the Model S.

• Tesla faced the immense challenge of setting up a new car factory from scratch to build the Model S by the summer of 2012 deadline.

• They acquired the former Toyota factory in Fremont, CA which came with some equipment but was lacking crucial machines like those used for stamping metal parts.

• Peter Rawlinson’s engineering team had developed the Model S design but now the factory team led by Gilbert Passin and Dag Reckhorn had to figure out how to build it.

• Reckhorn found and refurbished an old stamping machine to shape aluminum parts like the hood, but the process of stamping small batches was slower than a large automaker’s continuous production.

• The factory workflow began with aluminum coils being stamped into parts, then welded together in the body shop to form the car’s frame and outer panels. Teams were still learning the challenges of low-volume production versus a high-volume automaker’s process.

• It was an immense learning process to stand up this new production system from nothing, but critical to meeting Tesla’s deadline to start delivering the Model S in the summer of 2012.

• The vehicle assembly process at Tesla’s factory involved coordinated movements executed with precision as various frames moved between stations via automated carts guided by magnetic tape. This allowed flexibility as the number of workstations needed doubled.

• In the paint shop, vehicle bodies were electrocoated and primed before receiving their color coat and clear coat. Tesla refurbished an existing paint shop for $25 million instead of the planned $10 million to gain better robot flexibility.

• Final assembly involved complex tasks like attaching seats, windshields, and marrying the body to the battery pack by hand with hundreds of workers. Engineering was not ready with the vehicle design, challenging layout planning.

• Shortly before production, a safety test failure risked delay. Through quick problem solving, a stronger steel grade was sourced and tested, passing on the Monday deadline. However, Tesla prioritized speed over comprehensive testing processes used by competitors.

• Musk continued making cosmetic changes against engineer advice, like larger tires that complicated other systems. He acknowledged the intensity of the production launch challenges in an “ultra hardcore” email to employees. Vehicle assembly remained a work in progress as the design kept changing.

• In late 2012, Tesla was struggling to ramp up production of the Model S at its Fremont factory. It had promised to deliver 5,000 cars by year’s end but was on pace for only half that.

• Cash was running low as operating costs soared while expected revenue from car sales did not materialize due to production delays. Tesla lowered its sales projections and announced plans to raise more money through stock offerings.

• This sparked criticism in the media about Tesla’s struggles. The company was mentioned alongside other green energy companies like Fisker and Solyndra that had received government loans but were facing difficulties.

• By the end of 2012 Tesla had managed to reach a production rate of 400 cars per week. But in early 2013, while production was stable, the sales team was still not closing deals with the thousands of customers who had pre-ordered cars. For the first time Tesla had hundreds of unsold vehicles sitting in inventory.

• CFO Deepak Ahuja calculated that at this rate, Tesla only had enough cash to last about a month. Musk would need to take action to shore up the company’s finances and start delivering cars to customers.

• Tesla’s CEO Elon Musk told investors the company expected to turn a “slight profit” in Q1 2013, which would be a major milestone after losing over $1 billion previously.

• Tesla’s CFO projected they would break even if they delivered 4,750 Model S vehicles in Q1. Musk challenged the head of global sales to deliver on this to keep the company alive.

• Through an all-hands-on-deck effort to spur sales in the final weeks, Tesla exceeded this target and delivered over 5,000 vehicles. They turned a $11 million profit rather than just breaking even.

• In addition to vehicle sales, Tesla earned $68 million from selling regulatory credits to other automakers in Q1, adding significantly to their profitability.

• Hitting profitability for the first time was a major accomplishment for Tesla and sparked a rise in their stock price in the following days and weeks. It demonstrated Musk’s vision for the company was achievable.

• On April 22, Tesla’s stock closed at $50.19. This was a relief for recruiter Avalos and signaled the public market was rewarding Tesla.

• However, the previous months had rattled Musk as Tesla again came close to running out of money. He complained about catering to short-term market whims instead of long-term goals.

• There was also increased regulatory scrutiny, including an SEC investigation into a large Tesla shareholder’s stock sales. This led to bad press and left a bad taste.

• Musk soured on public markets and announced SpaceX would not go public anytime soon due to stock volatility distracting from product development.

• Tesla’s Model S received rave reviews from Consumer Reports, scoring 99/100 and signaling it was a mainstream vehicle, not just a science experiment.

• Despite success, Musk took steps to regain control, pushing for more transparency and direct involvement in all levels of the company. He also paid off government loans early using funds from new investments.

• Previously, Musk had quietly offered to sell Tesla to Google for $6-11 billion but talks ended once first quarter deliveries were successful. Tesla no longer needed a buyout.

• Dan Akerson, the CEO of GM, drove a Tesla Model S in 2013 and was impressed with it. The Model S was gaining popularity and credibility as an electric vehicle, in contrast to GM’s Chevrolet Volt which was not selling as well.

• Akerson created a task force within GM to study Tesla as a potential threat. While GM engineers were skeptical of Tesla’s technology, Akerson recognized the need for new thinking and saw similarities between Tesla’s approach and GM’s past innovations that did not make it into vehicles.

• When some Model S cars caught fire in late 2013 from road debris, Tesla was able to quickly update the vehicles’ software remotely to lift the body and reduce risks, showing their agility. In contrast, GM struggled more with developing the Volt.

• Though impressed by the Model S, GM’s task force still questioned Tesla’s battery technology, user interface, sales strategy, and high starting price of $100,000, which exceeded most vehicles GM offered.

• Bill Wolters, a longtime lobbyist for car dealers in Texas, visited Tesla headquarters to meet with Elon Musk and convince him to sell vehicles through franchise dealerships.

• Tesla had opened two galleries in Texas but was facing legal challenges in other states from dealers trying to block direct sales.

• Musk’s celebrity profile was growing, in part due to SpaceX’s expansion in Texas. However, he was also dealing with personal turmoil after remarrying actress Talulah Riley.

• Tesla benefited from extensive free media coverage of its stores and vehicles, rather than traditional advertising like other automakers.

• Wolters argued that using dealers could help Tesla shoulder costs and expand more easily in states like Texas. However, Musk was opposed to the franchise model.

• The meeting between Wolters and Musk didn’t change Tesla’s direct sales approach, setting up an ongoing conflict with car dealers over distribution models.

• The passage discusses Elon Musk’s ambitions to make Tesla a major car company and his battle with Texas car dealers over direct sales.

• Musk met with Texas dealers association head Ed Wolters but they strongly disagreed on the dealership model. Musk wanted to sell direct while Wolters fought to maintain the franchise dealership system.

• Musk aggressively lobbied in Texas, spending hundreds of thousands to change state laws banning direct sales. However, the dealers also lobbied heavily and had more influence.

• Bills narrowly allowing Tesla direct sales passed a committee but ultimately failed in the Texas legislature in 2013. Tesla promised to try again in 2015.

• Meanwhile, Musk, Straubel and Tesla ramped up plans for the Model 3, their goal of making affordable EVs for the masses. Musk hoped the former GM factory in Fremont could build 500,000 vehicles per year, far more than Tesla’s production to date. But scaling up to mainstream volumes posed major challenges.

• Tesla was dependent on Panasonic for batteries and was facing constraints in increasing Model S production due to limited battery supply. Batteries were very costly at around $250/kWh.

• Straubel and Musk realized they would need their own battery factory to scale up for the Model 3. This would cost billions, but scaling battery production would help drive down costs.

• Tesla’s relationship with Panasonic was rocky due to pricing issues. Musk was unhappy with Panasonic’s proposed prices for Model S batteries.

• Tesla considered making their own batteries but initially lacked the expertise. They later reached a deal with Panasonic to supply batteries for 80,000+ vehicles over 4 years.

• Demand for Model S surged in 2013, but Panasonic wanted to raise prices instead of cut them. This prompted Musk to formally pursue plans for Tesla to make their own batteries for the Model 3.

The passage describes Elon Musk and JB Straubel working together to conceive an ambitious plan for a giant battery factory, called the Gigafactory, to dramatically lower the costs of electric vehicle batteries. This would be key to making EVs affordable and achieving Tesla’s mission.

Straubel proposes building the factory in phases and tries to enlist Panasonic as a partner. To convince Panasonic’s CEO Yamada, Straubel begins secretly clearing land for construction in Sparks, Nevada without yet having funding or permits secured. He stages an elaborate demonstration of construction equipment for Yamada to illustrate Tesla’s serious commitment to the project.

Their goal is to pressure suppliers and state governments into assisting with the multibillion dollar costs. Whichever state provided incentives could attract thousands of jobs. Through these unconventional tactics, Musk and Straubel hope to fulfill their vision of mass producing affordable electric vehicles.

• Tesla was gaining popularity in Norway due to government incentives that lowered the effective cost of its vehicles to around $60,000. Sales were soaring there.

• China was seen as an even more promising market due to polluted cities, government push for EVs, and tax breaks lowering costs. It was projected to fuel global EV market growth.

• Elon Musk tasked Jerome Guillen with leading global sales and service after George Blankenship’s departure.

• Guillen hired Veronica Wu from Apple to lead Tesla’s expansion in China. Her priorities were getting government approvals and addressing the lack of charging infrastructure in cities.

• Musk visited Beijing and celebrated first Model S deliveries there in April. However, the Chinese market presented challenges as customers expected more luxury dealer experiences compared to bare-bones Tesla stores. Infrastructure issues also put pressure to expand Supercharging stations quickly in major cities.

• Wu argued for partner retailers in China like Apple used, but Guillen knew Musk opposed franchising and wanted to control the sales experience. Rising popularity in Norway and potential in China made these crucial new markets for Tesla’s future growth.

• Tesla was struggling with sales in China after Elon Musk announced a new, improved version of the Model S with faster acceleration and more advanced autopilot features. This caught the China team off guard and many existing customers canceled orders to wait for the new model.

• Sales in China dropped significantly in Q4 2014 as a result. The head of the China team, Guo Guangchan, was fired and blamed for the sales decrease.

• In Norway, where Tesla saw early success due to government EV subsidies, repair wait times were growing significantly to over 2 months on average. This indicated potential problems scaling service as sales increased.

• US owners were also starting to complain more about vehicle issues online. A loyal owner, Bonnie Norman, suggested Tesla develop a stronger owner education program to help new owners.

• In early 2015, Tesla was still missing Musk’s goal of 55,000 vehicle sales that year. The sales department was struggling under pressure. Guillen temporarily stepped away and later left the company.

• Musk took direct control of sales and brought in outside consultants like Hayes Barnard to diagnose problems and revise the sales process to focus more on closing deals quickly.

• Musk wanted a new COO to handle non-engineering tasks. He approached Sheryl Sandberg but ultimately hired Jon McNeill, an experienced entrepreneur in the auto industry.

• Lawrence Fossi worked as the manager of billionaire Stewart Rahr’s family office in Trump Tower. He became familiar with Tesla through Rahr, an early investor.

• Fossi was skeptical of Elon Musk’s 2014 presentation promoting Tesla’s plans for rapid battery swapping, as this never materialized. He saw the enthusiastic crowd response as akin to a religious revival, with Musk portraying himself as a visionary preacher.

• During the presentation, Tesla claimed it could swap a Model S battery in under 2 minutes, faster than filling a gas tank. But the audience couldn’t see the swapping process, raising doubts.

• This presentation was likely aimed at helping Tesla qualify for regulatory credits, rather than being a viable solution. Fossi began to question if Tesla was overvalued given its unfulfilled promises.

• Some investors had also been short selling Tesla stock, betting the price would fall to match its real value rather than the hype around the company. Fossi was emerging as a Tesla skeptic influenced by its flashy claims not matching reality.

• Short selling involves borrowing a stock from an owner, selling it right away at the current price, and then hoping the price drops so it can be bought back at a lower price to return to the original owner, pocketing the difference. There is theoretically unlimited downside risk if the stock price rises instead.

• By 2015, about 20% of Tesla shares were being short sold, adding volatility to the stock price. The price fluctuated dramatically over years but generally trended upward. Short sellers hoped to profit from periodic price drops but losses were accumulating as Tesla’s value increased long-term.

• Legendary short seller Jim Chanos predicts Enron’s collapse based on skewed accounting and unrealized future revenue being reported currently. He helped expose the company.

• By 2015, Chanos begins questioning valuations of Tesla and SolarCity, Musk’s solar panel company. He notes fundamental issues like high debt and cash burn at SolarCity. His comments drove share prices down.

• Musk saw Tesla, SolarCity and SpaceX as complementary businesses he controlled, so issues at one threatened his overall empire’s stability due to their intertwined personal and corporate finances.

• Richard Ortiz had long dreamed of working in the Fremont car factory since he was a child, even though his father did not work there. He wanted to become president of the local UAW union.

• GM closed the Fremont factory in 1982 due to competition and mismanagement. It was seen as one of GM’s worst performing plants.

• In 1984, Toyota partnered with GM to reopen the factory, called NUMMI. Toyota brought its manufacturing system which emphasized continuous improvement, respect, and standardized work. This was a big change from the previous culture.

• Under the new system, work was designed to be efficient and the assembly line moved at a constant speed. Workers were empowered to stop the line if issues were spotted. The goal was quality production the first time.

• It was a challenge implementing this system, especially when managers faced production quotas. Senior managers had to truly live by the principles for the changes to take hold.

• A Tesla factory in Fremont, California formerly operated jointly by GM and Toyota was facing closure as the partnerships ended.

• Miguel Ortiz had worked at the factory for almost 20 years before leaving in 2006. He witnessed the struggles as it closed down.

• In 2010, Tesla acquired the factory but needed far fewer workers due to automation and smaller production runs.

• Ortiz returned to the factory in late 2015 after being encouraged by his son. He was impressed by renovations but sensed anxiety among workers.

• Tesla was struggling to ramp up production of the new Model X SUV on time. Elements like the innovative falcon wing doors caused major production challenges.

• Just before a launch event, teams worked around the clock to assemble the first Model X vehicles by hand due to issues with the production process and parts.

• The event was a success as the doors worked, but Tesla was still far from being able to achieve their ambitious production targets for the Model X. Ortiz returned during a difficult time for Tesla’s manufacturing operations.

• Tesla was struggling to ramp up Model X production to meet Elon Musk’s goal of producing around 1,250-1,400 vehicles per week.

• Issues like doors and windows not working properly led to hundreds of problematic vehicles stacking up in the parking lot.

• Worker Jose Moran Ortiz noted quality issues and a lack of process standardization compared to his experience at Toyota. Problems were often just patched rather than properly fixed.

• Injuries were rising due to ergonomic issues and physically demanding rework tasks.

• Despite long hours, the last push of 2015 fell short of weekly goals but total annual production was within Musk’s promised range.

• Musk was losing patience with production issues as he juggled personal relationships and struggles at SolarCity. He spent time sleeping at the factory to help address problems.

• Apple had begun developing its own electric car and started poaching Tesla executives, fueling tensions between Musk and Apple CEO Tim Cook.

• Elon Musk wanted to name the Model 3 “Model E” so the company’s lineup would spell S-E-X, but Ford owned the trademark for Model E. So they went with “3” instead.

• Doug Field noticed divisions between the “car guys” and “tech guys” at Tesla when he joined. The car guys came from auto backgrounds and the tech guys from tech. There were cultural mismatches between the groups.

• Field saw that Tesla needed to change its approach if the Model 3 was going to succeed as a mass market vehicle. Past mistakes on luxury models wouldn’t work. The company was too large now.

• In an early meeting, Field put up a slide to focus the team on delivering the Model 3 for $35k, over 200 miles of range, and a customer experience similar to the Model S, but at a lower cost. This was a different mandate than Musk’s past approach of maximizing performance without regard for costs.

• Tesla was working to develop the Model 3, an affordable electric sedan aimed at mainstream buyers. The starting price target was $35,000 to be competitive with cars like the BMW 3 Series.

• Battery costs were still a major challenge. Straubel’s Gigafactory partnership was helping to reduce costs, but more needed to be done to make the Model 3 affordable.

• Field crafted a presentation to motivate engineers by showing how every dollar reduced from costs would mean more sales and adoption of electric vehicles. They worked to cut costs through materials, efficiency improvements, and innovations like new vent designs.

• A key focus was improving manufacturing efficiency to avoid the issues Tesla faced with the Model X launch. Field brought together design and factory teams to get them aligned early.

• Tesla planned to debut the Model 3 in late 2017 and ramp up production over time, with an ambitious goal of 500,000 vehicles per year by 2020. This was a major scaling up that needed to be carefully executed to avoid the problems of prior launches.

• Straubel quietly authorized Tesla engineers to convert a gas truck into an electric vehicle prototype using Model S battery packs, seeing potential for electric trucks shuttling between factories.

• Musk was impressed by the prototype but decided the project wasn’t for Straubel, wanting instead to recruit Jerome Guillen back to Tesla to oversee it. Guillen returned in 2016.

• In March 2016, Tesla revealed the Model 3 to hundreds of customers and supporters. Over 200,000 reservations came in that night, far exceeding expectations.

• Musk decided to accelerate Model 3 production rather than wait until late 2017 as originally planned, despite opposition from Field and concerns about readiness from Straubel. Musk wanted to meet demand and generate cash flow faster.

• Field’s team had to drastically update their plans to begin assembling the Model 3 six months earlier than planned and at a much more aggressive production rate than ever intended.

• Tesla’s CEO Elon Musk wanted to accelerate production timelines for the Model 3 electric vehicle to meet ambitious production targets of 500,000 vehicles by 2018 and 1 million by 2020. This was a major acceleration from prior targets.

• Some managers expressed doubts about the aggressive schedule but Musk pushed back strongly, even firing managers who disagreed. Suppliers also had concerns about the accelerated timeline.

• In May 2016, Musk formally announced the accelerated production targets to investors. He instructed suppliers to be ready for volume production to start in July 2017.

• Around this time, Tesla was looking to raise funds for Model 3 production. Musk also quietly worked to figure out a way for Tesla to acquire the struggling solar company SolarCity, where his cousin was CEO.

• An acquisition of SolarCity was initially rejected by Tesla’s board due to financial risks, but Musk continued pushing for it. He raised the idea again in late May 2016 amid Tesla’s fundraise. The board then authorized Tesla to assess an acquisition.

So in summary, Musk set extremely ambitious targets for the Model 3 against concerns from managers and suppliers, while also pursuing the controversial acquisition of SolarCity during a key period for Tesla’s production plans and financing.

• Musk and the Tesla board were considering acquiring SolarCity, where Musk’s cousins Lyndon and Peter Rive served as CEO and CTO. Tesla saw potential synergies in expanding into energy storage.

• However, CFO Deepak Ahuja expressed concerns about the deal’s impact on Tesla’s ability to borrow money. Short sellers like Jim Chanos were also critical of the potential acquisition.

• The board decided board member Robyn Denholm should communicate with investors given her lack of ties to SolarCity. They set an acquisition price range of $26.50-$28.50 per share, or up to $2.8 billion.

• When announced, SolarCity shares rose but Tesla shares fell sharply, losing $3.38 billion in valuation. Analyst notes were also largely critical citing lack of synergies and financing risks.

• Internally, many Tesla managers were skeptical as they saw major cultural differences between the sales-focused SolarCity and mission-driven Tesla. Engineering staff felt SolarCity’s talent was subpar.

• In response, Musk published a new “Master Plan” outlining his vision of integrated solar, batteries and vehicles, but skepticism over the SolarCity deal remained.

• Musk outlined ambitious future plans for Tesla, including a pickup truck, semi-truck, and eventually replacing car ownership with autonomous robot taxis that customers can deploy to earn income.

• Tesla’s Autopilot system was generating interest but also critics after a fatal crash in Florida. Musk pushed to expand Autopilot’s capabilities while some engineers had concerns about overpromising.

• In late 2016, Tesla reported its second ever profitable quarter, helped by emissions credit sales. Musk then pushed the merger of Tesla and SolarCity.

• In 2017, the NHTSA closed its investigation into Autopilot, citing data that crash rates dropped 40% after installation. Musk was excited by this figure.

• Analyst predictions of Tesla’s rising stock value valued it above Ford and GM. Musk dropped “Motors” from Tesla’s name. The stock began rising dramatically on optimism around autonomous vehicles and Tesla’s future plans.

• Elon Musk held a meeting with journalists at the Tesla factory to mark the start of Model 3 production. He had previously tweeted targets of building 100 cars in the first month and over 1,500 in September.

• However, Musk acknowledged this would be very challenging. He warned of at least six months of “manufacturing hell” as Tesla worked to ramp up production and reach its target of 5,000 vehicles per week by the end of the year.

• Musk noted unforeseen issues like floods, tornadoes or ships sinking could disrupt their plans. Building the Model 3 production was a huge leap compared to previous models.

• When asked about his mood, Musk paused and said he would be more upbeat that evening at the event celebrating the handover of the first 30 Model 3 cars to customers. But he acknowledged the challenges ahead in ramping up mass production of the Model 3.

• Elon Musk gave a downbeat speech at an event celebrating the handover of the first 30 Model 3 cars, which had been hand-built rather than coming from a new production line.

• A Motor Trend review praised the Model 3, calling it the most important vehicle of the century and saying it marked the beginning of the second era of cars.

• However, the factory’s assembly line was not operational yet and the cars were still being hand-built. Production was far below Musk’s goals.

• Two Tesla workers, Richard Ortiz and Jose Moran, had been quietly organizing to unionize the workforce with the UAW. Moran publicly spoke out about poor working conditions.

• Musk denied Moran worked for Tesla and accused the UAW of paying him to agitate for a union. In reality, Moran did work for Tesla.

• The battery production teams led by Panasonic also were not ready for high volume production. A key Tesla manager overseeing this relationship, Kurt Kelty, left the company.

• Tesla was struggling greatly to ramp up Model 3 production due to challenges in setting up the new factory and automation systems for the first time.

• Tesla had around 1,000 robots packed tightly together in the Gigafactory Model 3 body shop, hung from the ceiling to maximize space. Engineers struggled to access and fix robots due to the tight packing.

• Battery pack production had to be done by hand at times due to robot issues. Panasonic workers were borrowed to help.

• Bottlenecks caused 100 million battery cells from Panasonic to stack up in storage, costing Tesla millions in inventory sitting idle.

• Production problems enraged Musk, who began firing people personally at the factory floor without reasoning, blaming others but not himself.

• On a bad quarterly earnings day, Musk lied ill on the factory floor for hours before the call, sounding awful during the announcement.

• Musk resented Tesla being public and wished it could be private again to operate more efficiently.

So in summary, tight robot packing and bottlenecks at the Gigafactory caused major battery production problems, wasting huge amounts of inventory and enraging Musk who began firing people irrationally on the factory floor during this difficult period.

• Elon Musk demanded a new compensation package from Tesla’s board that would make him the highest paid CEO ever and potentially one of the richest people in the world if all goals were met. The ambitious plan tied his pay to Tesla achieving massive growth targets over 10 years.

• This caused some tension with senior leadership who felt they deserved more reward for the company’s success. It particularly strained Musk’s relationship with co-founder JB Straubel.

• Musk took over direct control of the Fremont factory as it struggled to ramp up Model 3 production. He demoted the executive in charge of manufacturing, Doug Field.

• Additional unautomated assembly lines were added to boost production but increased costs. Musk wanted to slash jobs quickly to cut costs as projections showed profits wouldn’t be achieved at the targeted production rate.

• Musk came down hard on engineers working on the production lines, berating them and demanding to know how they would fix problems, which caused at least one engineer to quit on the spot.

• Martin Tripp, a Tesla employee, anonymously emailed several news outlets with claims that Elon Musk was lying to investors about Tesla’s production numbers and alleging issues at the Gigafactory.

• Business Insider journalist Linette Lopez began corresponding with Tripp and digging into his claims.

• Lopez then published an article citing internal Tesla documents from Tripp that said the company was experiencing up to 40% waste/scrap in battery pack and drive unit production at the Gigafactory, costing $150M.

• Tesla denied the level of waste claimed but acknowledged high initial scrap rates are normal in a manufacturing ramp. Production problems and meeting Model 3 targets remained a challenge.

• The article brought unwanted attention to Tesla’s production and financial issues at a critical time as they tried to reach the 5,000 units/week goal by the end of the quarter.

So in summary, a Tesla employee leaked internal documents to the press alleging serious production issues and wastage at the Gigafactory, which led to negative publicity that exacerbated challenges facing Tesla’s Model 3 production ramp.

• Elon Musk and Tesla had just achieved the important milestone of producing 5,000 Model 3s in a week, alleviating concerns about production delays.

• However, attention now needed to turn to deliveries, as an inability to deliver cars in the past had almost wrecked the company. Tesla needed to deliver many more than its previous record to generate much-needed cash.

• Musk took a short break to attend his brother’s wedding in Portugal. Friends had been worried about Musk eschewing rest and seeming increasingly unhinged in public comments.

• Around this time, Musk became obsessed with the rescue efforts of a boys soccer team trapped in a Thai cave. He proclaimed Tesla engineers would design a mini-submarine to help, even though its usefulness was unclear.

• Musk’s excessive Twitter use was becoming a problem. Without evidence, he privately mused short sellers were behind leaks from a former Tesla employee. He was on the verge of a public meltdown that could damage his reputation and distract from Tesla’s needs.

• Elon Musk offered to help with the Thai cave rescue by sending a mini-submarine he had his engineers build, but it was never used as officials said it wouldn’t work for the rescue mission.

• Musk got into a public spat on Twitter with one of the rescuers, Vernon Unsworth, who criticized Musk’s submarine effort as a PR stunt. Musk lashed out and called Unsworth a “pedo guy,” damaging Tesla’s stock price.

• As Tesla struggled to ramp up Model 3 production, it asked some suppliers for refunds on prior payments, alarming suppliers. Musk also reached out to Apple about a possible acquisition of Tesla but talks did not materialize.

• On August 7th, Musk shocked markets by tweeting that he was considering taking Tesla private at $420 per share and that “funding was secured.” This triggered a stock surge and SEC investigation over the accuracy of his statements.

• Elon Musk tweeted in August 2018 that he was considering taking Tesla private at $420 per share, saying “funding secured.” This surprised investors and regulators.

• Tesla’s communications team was caught off guard by the tweet. Musk proceeded with his day as normal while others scrambled to understand the announcement.

• The Saudis had expressed interest previously in taking Tesla private or building a factory. Musk had met with them shortly before the tweet.

• Tesla’s board approved Musk contacting investors about a potential deal. Advisers like Silver Lake’s Egon Durban warned about difficulties allowing all current investors to remain private.

• Musk’s tweet and subsequent blog post clarifying the unclear details of any deal caused market confusion and an SEC investigation. Rumors swirled about Musk’s future as claims surfaced about Epstein’s purported role, which Musk denied.

So in summary, Musk abruptly announced considering taking Tesla private via tweet, surprising many, and struggled to clarify the unclear and preliminary nature of any potential deal, fueling further controversy and SEC scrutiny.

• Musk’s behavior and public feuds were causing turbulence at Tesla. Investors were worried and the stock price declined.

• The board called an emergency meeting to discuss options regarding Musk’s proposal to take Tesla private. Musk said funding was no longer secured so he was withdrawing the proposal. Tesla would remain public.

• However, Musk continued feuding on Twitter, accusing a British cave diver involved in the Thai cave rescue of being a pedophile. This led to more negative press.

• Musk did an interview on Joe Rogan’s podcast where he smoked marijuana on air. This further raised concerns about his erratic behavior amongst friends, PR advisors, and the Tesla board. It remained to be seen how regulators would respond to Musk’s recent actions.

• The article discusses Tesla’s efforts in late 2018 to deliver a large number of vehicles, around 100,000, in the last weeks of the third quarter to meet financial targets and help resolve SEC issues.

• Elon Musk relocated to a Tesla delivery center near the Fremont factory and held nightly calls to coordinate huge “waves” of deliveries across the US. This delivery surge put major pressure on the sales and delivery teams.

• Sales of the higher-priced Model 3 versions were prioritized to boost margins, as the $35k version was still unprofitable. However, many early reservation holders had expected the lower price.

• The delivery teams faced challenges converting reservations into sales as customers resisted higher prices or delays in the cheaper version. Resources were constrained due to cost cutting.

• It was unclear if Tesla could actually produce 100k vehicles in time, and have space to handle the inventory, but success or failure would only be known at quarter’s end due to the delivery surge strategy.

• Tesla was trying to achieve a profit in Q3 amid speculation about whether they were stacking sales in Q4 instead. Musk made deliveries the top priority.

• Delivery centers only had 100,000 appointment slots available in Q3 total. Cars were being parked anywhere as thousands of last-minute deliveries were needed. Short sellers noticed and speculated about defective inventory.

• Many cars did need fixes before delivery. One center got complaints, angering Musk who threatened firings over more complaints.

• Musk’s nightly calls with sales leaders increased pressure with implicit firing threats for not meeting demands.

• Musk ordered one manager, Hunter, to double next-day appointments or be fired. They came up with a texting solution and exceeded the target.

• Musk demanded 20,000 home deliveries instead of expanding centers. It was an untested strategy.

• Deliveries were rushed with 5-minute handovers instead of training. Trucks couldn’t keep up with increased shipments.

• A operations executive said they couldn’t hit 100,000 deliveries but was fired for not agreeing with Musk.

• Musk publicly screamed and followed a quitting manager, angering the board over accusations of pushing him.

• Musk was embroiled in negotiations with the SEC over accusations that he misled investors about taking Tesla private. He initially reached a settlement deal but backed out at the last minute, worrying it would affect SpaceX funding.

• The SEC then sued Musk, hoping to ban him from leadership roles at publicly traded companies. Tesla’s stock dropped on the news, enriching short sellers.

• Musk fought the SEC charges but eventually accepted a new settlement requiring him to step down as chairman for 3 years, pay $20 million fines, and have Tesla governance changes.

• As Tesla rushed to meet delivery goals, Musk and others worked in delivery centers. The company just missed Musk’s 100k goal but turned a profit, aided by upselling and delayed supplier payments.

• Looking to cut costs, Musk warned of a “dark winter” and considered closing Tesla stores. The sales team saw slowing Model 3 orders as federal tax credits were set to phase out. Many employees were laid off after the busy end of 2018.

So in summary, it describes Musk’s legal battles with the SEC and Tesla’s intensive efforts to hit delivery targets and turn a profit, while Musk pushed for cuts to prepare for financial challenges ahead.

• Tesla held a ceremonial groundbreaking for its new Shanghai factory, its first factory outside of Fremont. Musk, Shanghai mayor Ying Yong, and Musk’s friend Robin Ren attended. This represented a win for both China and Tesla.

• However, Tesla was on precarious financial footing. The Model 3 was now available but not truly affordable or viable at a mass scale yet due to costs. Musk still needed to drive down costs through greater production volumes.

• To achieve the necessary scale, he would need a significant infusion of cash. This pointed him toward ramping up production in China. On Twitter, Musk promised the Shanghai factory’s initial production would start in 2019. However, Tesla’s financial situation was deteriorating, putting its long term viability in question.

• In early 2019, Tesla announced plans to complete construction of its Shanghai Gigafactory by summer and begin Model 3 production by the end of the year. This was seen as another unrealistic timeline by Tesla observers.

• Behind the scenes, Tesla China head Robin Ren and others had been laying the groundwork for years to make the factory a reality. Ren was brought on due to his experience and relationship with Musk from college.

• Ren and others worked to gain approval and permits for the factory from Chinese authorities while navigating construction and politics. The eventual deal in late 2018 provided Tesla land and loans from Chinese banks to build the factory.

• China was eager to boost EV adoption and saw allowing Tesla to build there as a way to motivate domestic automakers. Meanwhile, other automakers like GM and VW were ramping up their own EV investments and timelines in response to Tesla’s lead.

• In early 2019, Musk was distracted by an SEC contempt case for tweets about Tesla’s production that violated an earlier settlement. He argued in court that the SEC was overreaching, and the judge agreed the SEC moved too quickly to hold him in contempt.

• Musk and Straubel were backstage before Tesla’s annual shareholder meeting, where Musk planned to announce Straubel’s departure as CTO after 15 years. However, Musk got cold feet and decided not to announce it that day, wanting Straubel to stay longer.

• At the meeting, Musk and Straubel discussed the success of the Model 3 and Gigafactory. Musk grew reflective speaking about meeting Straubel years ago. Straubel said they didn’t expect Tesla to come as far as it has.

• Tesla was making progress on its new factory in China. Executive Zhu was leading the project aggressively to keep Musk updated and deliver results. The factory was benefitting from Tesla’s experience and avoiding past mistakes.

• Tesla’s relationship with battery partner Panasonic had soured. Panasonic was hesitant to expand to China. Tesla prepared to find a new partner like LG Chem for the China factory without Panasonic.

• Musk initially chafed at the idea of partnering with CATL, the world’s largest EV battery maker, as they supplied many of Tesla’s rivals. However, he recognized the need for a battery supplier in China where Tesla planned to begin production by year’s end.

• Musk met CATL founder Robin Zeng and quickly approved of him, seeing him as a fellow engineer. This cleared the way for an eventual deal with CATL, reducing Tesla’s reliance on sole supplier Panasonic.

• Tesla’s sales and revenue grew significantly in 2019, boosted by demand in Europe, especially Norway, and China where production was set to begin. This led to Tesla’s first full-year profit.

• By late 2019, Tesla’s China factory was taking shape rapidly and received approval to begin production. initial trial production used high-quality machinery. This reassured investors as Tesla appeared poised for large-scale production.

• In late December 2019, Tesla began deliveries of Chinese-made Model 3s to employees, setting the stage for the official start of production celebration a few days later, which Musk attended in Shanghai. Tesla had achieved global scale production.

• In early 2020, Tesla was well-positioned to ramp up production of the Model Y SUV due to prior work by Doug Field’s team. The Model Y shared 70% of parts with the Model 3 to keep costs down.

• However, in February Tesla’s stock plunged 17% on news that its China factory would be delayed due to COVID-19. This raised concerns about the virus’ impact on China’s economy and the global supply chain.

• Tesla unexpectedly raised $2 billion in capital, possibly learning from past near-bankruptcies. As the virus spread, local governments started shutting down non-essential businesses, including the Fremont factory.

• Musk wanted to keep production going but eventually complied with the shutdown. Quarterly deliveries still grew 40% due to prior initiatives like home delivery. The Shanghai factory also resumed quickly.

• However, a prolonged shutdown threatened Tesla’s cash reserves. Musk pushed to reopen Fremont against local officials’ guidance, leading to tensions over when it was safe to resume production. The situation highlighted Tesla’s vulnerability to external disruptions.

• Tesla workers had mixed feelings about reopening the Fremont factory during the COVID pandemic - they wanted jobs but were worried about safety. Some decided to quit.

• Musk was under pressure to increase Tesla’s valuation to unlock stock option payouts worth over $700M. Defying health orders bolstered the stock price.

• Tesla managed to report only a small sales decline for Q2 2020, avoiding losses. Musk hit his stock valuation target and announced a new Texas factory.

• Tesla’s stock skyrocketed in 2020, making it the world’s most valuable automaker. Musk’s wealth surpassed $200B as his stock options vested.

• Former Tesla executives like Martin Eberhard, JB Straubel and Doug Field saw success with their new companies in EVs and batteries.

• Musk’s legal battle with whistleblower Martin Tripp ended with Tripp paying Tesla $400K. Musk remained focused on ambitious production goals despite challenges of batteries and the new Cybertruck pickup.

• Musk said his goal was to lower the cost of batteries to make electric cars more affordable. His target price for an affordable Tesla was $25,000, down from the previous target of $35,000.

• Tesla’s high stock price allowed it to easily raise money from investors. It executed a stock split and issued new shares, raising $19.4 billion. This gave Musk funds to continue pursuing his ambitious plans. Critics argued this cycle of raising funds based on stock hype was flawed.

• Critics pointed to issues like Tesla’s reliance on emissions credit sales, inconsistent quality, uncertain long-term demand, and Musk’s overpromises. Short sellers like Jim Chanos continued to bet against Tesla but conceded they had lost billions as the stock price rose in 2020.

• Even as Tesla delivered profits and sales gains, analysts said the stock was overvalued based on “hope” for the company’s future. Musk himself had called Tesla overvalued but was selling a vision of the sustainable transportation future that investors believed in.

Here is a summary of the key details from the passages:

• Henry Ford’s wife reportedly paid $100,000 in a settlement related to allegations about her husband. This detail comes from court records reviewed by the author.

• Driving the early electric Tesla Roadster prototype felt like driving a racecar according to one test driver.

• Elon Musk had the money to potentially invest in converting an existing sports car to electric according to emails reviewed by the author.

• Tesla’s 2004 business plan projected that an electric sports car that cost around $50,000 to produce could be sold commercially for around $100,000.

• During negotiations to invest in Tesla, Musk convinced the founders he knew enough about electric vehicles and business plans.

• Musk had been kicked out as CEO of PayPal in 2000 according to a Fortune article.

• Early Tesla employees worked to improve the electric powertrain and battery technology, drawing on lessons from past electric vehicle programs like the GM EV1.

• Apple recalled 1.8 million laptop batteries in 2006 due to overheating, which provided lessons for Tesla’s battery development.

• Martin Eberhard became increasingly antagonistic in negotiations over funding and leadership at Tesla.

• Bob Lutz was impressed by Tesla after test driving an early prototype and sensing the potential.

• George Blankenship left Chrysler to join Tesla as VP of Sales and Ownership Experience.

• Differences between the early Tesla Roadster and the donor Lotus Elise it was based on were minor, mostly relating to electronic components.

• Antonio Gracias, CEO of Valor Equity, was impressed by Musk’s vision and their partnership helped Tesla’s funding efforts.

• Issues arose over cost projections and responsibility for delays in manufacturing the first Tesla Roadsters.

• Musk’s mother, Maye Musk, is a dietician and famous model who helped instill a drive for learning in her son from a young age.

• Early positive reviews of the Tesla Roadster in publications like Motor Trend helped generate interest, but manufacturing challenges remained.

• Celebrities like Jay Leno were early adopters and helped promote the new electric sports car.

• By late 2008, Tesla was low on funds and negotiating new financing as the economy declined. Musk personally took out loans to keep the company operational.

Here are the key points from the sources provided:

• “Supply Batteries for Daimler’s Electric Mini Car” discussed Daimler partnering with Tesla to supply batteries for an electric mini car in 2009.

• The anecdote about “I don’t have the budget” comes from author interviews with Peter Rawlinson corroborated by other Tesla worker interviews at the time.

• Author interviews indicated Tesla argued they needed more capital from Daimler to support battery production.

• “If you were my employee” comes from a 2010 Marie Claire article where Justine Musk discusses her experience as Elon Musk’s first wife.

• Elon Musk’s 2010 Business Insider article aimed to “correct the record” about his divorce from Justine.

• Looking for a way out discusses the 2009 financial crisis and US threats of bankruptcy for GM and Chrysler.

• Interviews describe how the details of Tesla’s negotiations with Daimler over their partnership were unclear initially but neither side ultimately wanted to cede control.

• Martin Eberhard’s lawsuit provided details of his dispute with Elon Musk over Tesla’s founding.

• Musk tweeted in 2018 that producing the Tesla Roadster was the “most difficult” product to bring to market.

Here is a summary of the key points from the article:

• Tesla is discontinuing the 40 kWh battery option for the Model S due to lack of consumer demand. Most customers were opting for the larger 60 kWh and 70 kWh battery packs.

• The 40 kWh battery provided around 190 miles of range, compared to over 200 miles for the 60 kWh version. But many customers felt it didn’t provide enough range given the Model S price.

• Dropping the lower-range 40 kWh battery will simplify Tesla’s battery supply chain and production process. It can focus on just the higher-volume 60 kWh and 70 kWh battery packs.

• The discontinuation highlights how consumer preferences are shifting towards electric vehicles with more range rather than minimal ranges. Longer range helps address driver concerns and anxieties about running out of charge.

• For Tesla, focusing on fewer battery options helps improve manufacturing efficiencies as it tries to ramp up Model S and upcoming Model X production volumes.

Here is a summary of the key events regarding Elon Musk and Tesla in March-August 2018 based on the chapter:

• In March, Musk held a meeting with Tesla executives where the shortcomings of the Model 3 production line were discussed, including issues with parts being hand-made.

• Panasonic, which supplied battery cells for Tesla, was unhappy with production problems at Tesla.

• Tesla claimed it was producing over 2,000 Model 3s per week but was actually producing far fewer. This led to a criminal investigation over production claims.

• Issues continued with battery pack assembly being largely manual. Batteries needed to be assembled by hand which slowed production.

• Musk was very hands-on, visiting the production line frequently and getting into the details of problems. However, his demanding style strained relations with some managers.

• In May, Tesla began preparing an advertising campaign amid its production struggles, though issues were not fully disclosed to customers yet.

• Whistleblower Martin Tripp, a former Tesla technician, began communicating with journalists in mid-2018 about safety and quality issues at Tesla.

• Tripp had disagreements with Tesla security chief Sean Gouthro, leading to threats of legal action from Musk against Tripp in mid-2018.

• Musk’s erratic behavior on Twitter attacking critics and the media increased amid the production issues. This led to multiple conflicts, including with the SEC.

So in summary, major Model 3 production issues continued through mid-2018, causing delays and problems, while Musk’s confrontational style heightened tensions both internally and externally during this period.

Here is a summary of the key points from the passages:

• Tesla chair Robyn Denholm defended Musk’s tweets but acknowledged they had landed him in court.

• Tesla shares fell almost 7% after the company missed Model 3 delivery targets and cut prices in January 2019.

• In late February 2019, the SEC asked a court to hold Musk in contempt for violating their settlement over his infamous “funding secured” tweets.

• Tesla shifted to online-only sales in February 2019 and started taking orders for the $35,000 Model 3 version.

• Landlords argued Tesla was still on the hook for store leases even after shifting to online sales.

• Fiat Chrysler agreed to spend $2 billion on emissions credits from Tesla and Tesla’s debt load had fallen.

• Short sellers began covering their positions as Tesla’s fortunes improved in 2019 following a difficult 2018 with falling China sales.

• The summaries provide an overview of several key events and business developments regarding Tesla, Elon Musk, and the automotive industry in late 2018 and early 2019.