Tesla, Inc. (formerly Tesla Motors) is an American automaker, energy storage company, and solar panel manufacturer based in Palo Alto, California. Founded in 2003, the company specializes in electric cars, lithium-ion battery energy storage, and residential photovoltaic panels (through the subsidiary company SolarCity). The additional products Tesla sells include the Tesla Powerwall and Powerpack batteries, solar panels and solar roof tiles.
CEO Elon Musk said that he envisions Tesla as a technology company and independent automaker, aimed at eventually offering electric cars at prices affordable to the average consumer. The company is named after Serbian electrical engineer and physicist Nikola Tesla.
The company's Model S was the world's best-selling plug-in electric car in 2015 and 2016. Global sales of the Model S reached 150,000 units in November 2016. In September 2015 the company released its Model X, a crossover SUV. The Model 3 was released in July 2017. Tesla global sales passed 250,000 units in September 2017.
Tesla operates multiple production and assembly plants, notably Gigafactory 1 near Reno, Nevada and its main vehicle manufacturing facility at Tesla Factory in Fremont, California. The Gigafactory primarily produces batteries and battery packs for Tesla vehicles and energy storage products.
In 2016, Tesla topped Consumer Reports' Annual Owner Satisfaction Survey at 91%. In February 2017, Consumer Reports named Tesla as the top American car brand and ranked it 8th among global carmakers.
The company was founded in 2003 by Martin Eberhard and Marc Tarpenning, although the company also considers Elon Musk, JB Straubel and Ian Wright as cofounders. The founders were influenced to start the company after GM recalled and destroyed its EV1 electric cars in 2003.
Eberhard and Tarpenning funded the company until the Series A round. Musk led the Series A in February 2004, joining the board of directors as its chairman as well as in operational roles. Musk was then the controlling investor in Tesla, providing the large majority of the US$7.5 million round with personal funds. Co-founder Martin Eberhard was the original CEO of Tesla until he was asked to resign in August 2007 by the board of directors. Eberhard then took the title of "President of Technology" before ultimately leaving the company in January 2008 along with co-founder Marc Tarpenning, who served as the Vice President of Electrical Engineering of the company until 2008.
Tesla began with a sports car aimed at early adopters followed by mainstream and mass market vehicles, all serving "as a catalyst to accelerate the day of electric vehicles".
Tesla signed a Roadster production contract on July 11, 2005, with Group Lotus to produce "gliders" (complete cars minus powertrain). The Roadster used an AC motor descended directly from Nikola Tesla's original 1882 design.
The Roadster was the first production automobile to use lithium-ion battery cells and the first production EV with a range greater than 200 mi (320 km) per charge. Between 2008 and March 2012, Tesla sold more than 2,250 Roadsters in 31 countries. Tesla stopped taking orders for the Roadster in the U.S. market in August 2011.
In December 2012, Tesla employed almost 3,000 full-time employees. As of late 2016, Tesla now employs over 30,000 (25,000 in the US) after acquiring Grohmann and SolarCity.
Musk also led Tesla's Series B US$13 million investment round and co-led the third, US$40 million round in May 2006. Tesla's third round included investment from prominent entrepreneurs including Google co-founders Sergey Brin and Larry Page. The fourth round in May 2007 added another US$45 million.
In late 2007, Tesla brought on Michael Marks, and later Ze'ev Drori, to replace Eberhard as CEO. Drori temporarily returned the company to profitability, reducing the company's workforce by about 10%. In October 2008, Musk became CEO and laid off an additional 25% of Tesla's workforce. In December a fifth round added another US$40 million, avoiding bankruptcy.
By January 2009, Tesla had raised US$187 million and delivered 147 cars. Musk himself had invested US$70 million. In May, 2009 Daimler AG acquired an equity stake of less than 10% of Tesla for a reported US$50 million, again saving Tesla. Toyota provided a similar amount in 2010.
In June 2009 Tesla was approved to receive US$465 million in low-interest loans from the 2007 US$8 billion Advanced Technology Vehicles Manufacturing Loan Program by the United States Department of Energy. The funding came in 2010 and supported engineering and production of the Model S, as well as the development of commercial powertrain technology.
On June 29, 2010, Tesla launched its initial public offering (IPO) on NASDAQ. 13,300,000 shares of common stock were issued to the public at a price of US$17.00 per share. The IPO raised US$226 million.
Tesla began shipping its Model S sedan in June 2012 and its Model X crossover SUV in September 2015. Global sales of the Model S reached 100,000 in December 2015.
Model 3 was unveiled in March 2016. A week after the unveiling, global reservations totaled 325,000 units. As a result of the demand for Model 3, in May 2016 Tesla advanced its 500,000 annual unit build plan (for all models) by two years to 2018.
In May 2013 Tesla raised $1.02 billion ($660m from bonds) partially to repay the DOE loans (early) after their first profitable quarter. In February 2014 the company sold $2 billion in bonds (to build GigaFactory 1). In August 2015 Tesla sold $738 million in stock (for the Model X) and in May 2016 $1.46 billion in stock ($1.26 billion for the Model 3). As of January 29, 2016, Musk owned about 28.9 million Tesla shares, or about 22% of the total.
Tesla stated that its automotive branch had a gross margin of 23.1% as of 2Q2016, and has generally been above 20%. However, expenditures for expanding future production (such as Gigafactory 1 and Model 3) are bigger than product profit, resulting in a net loss.
On February 1, 2017 the company changed its name from Tesla Motors to Tesla.
In late March 2017, Tesla Inc. announced that Tencent Holdings Ltd., at the time China's "most valuable company," had purchased a 5% stake in Tesla for $1.8 billion.
In 2017, Tesla briefly surpassed Ford Motor Company and General Motors in market capitalization for a couple of months, making it the most valuable American automaker. In June 2017, Tesla appeared for the first time in the Fortune 500 list.
Tesla deliveries vary significantly months due to regional issues such as ship availability and registration. Tesla does not follow the auto industry standard of monthly reporting. Some monthly sales are estimated by media.
On August 1, 2016, Tesla agreed to acquire SolarCity Corp. for $2.6 billion in stock. SolarCity is the largest installer of rooftop solar systems in the United States. More than 85% of unaffiliated Tesla and SolarCity shareholders voted to approve the acquisition, which closed on November 21, 2016.
In the week preceding the debut on July 7, 2017, of the Model 3 sedan, Tesla's stock-market value declined by more than $12 billion from a previous value of $63 billion. The loss was a result of a combination of factors that disappointed investors. Demand for Tesla’s luxurious existing models, Model S and Model X, did not grow in the second quarter. Brian Johnson of Barclays said that customer deposits for the Model S and Model X fell by $50 million, potentially indicating that Tesla's introduction of the Model 3 could be adversely affecting their sales. Tesla predicted that luxury sales would reach 100,000 per year, below some analysts' expectations.
Investors expressed concern about Tesla's plans for execution and competitive risk, as Volvo committed to eliminate its petroleum-only vehicles by 2019. Johnson claimed that "Tesla will face intense competition by the next decade."
Morningstar analyst David Whiston foresaw a revised, slower timetable for the Model 3 and a company acknowledgement of problems with building battery packs for its cars. In 2016 Musk predicted 100,000 Model 3 units would be sold in 2017, but that production may reach only 20,000 by December. Axel Schmidt, a managing director at consulting firm Accenture, said that Tesla’s problems with Gigafactory 1 prove that increasing Model 3 production "remains a huge challenge".
As of October 2017, Tesla reported delivery of 220 Model 3s, acknowledging this was "less than anticipated due to production bottlenecks".
In early November 2017, Musk advised investors of a production delay that was primarily due to difficulties with the new battery that would allow Tesla to significantly reduce the manufacturing cost of the Model 3. The company was having difficulties with robots on the assembly line but the most serious issue was with one of the four zones in the battery, caused by a "systems integration subcontractor", according to Musk. "We had to rewrite all of the software from scratch for the battery module", he reported. He assured investors that Tesla had "reallocated" top engineers to work on achieving a solution. By that time, Jon Wagner, director of battery engineering, had left the company.
Musk postponed the target date for manufacturing 5000 of the vehicles per week from December 2017 to "sometime in March" 2018. When asked when the company would reach a production level of 10,000 units per week, he declined to speculate.
Tesla aims to disrupt the automotive industry by creating many innovative pieces that fit together; this strategy was called "complex coordination" by Tesla investor Peter Thiel. Its marketing, production, sales and technology strategies all are notably different from its competitors.
Tesla's automotive strategy is to emulate typical technological-product life cycles and initially target affluent buyers. It would then move into larger markets at lower price points. The battery and electric drivetrain technology for each model would be developed and paid for through sales of the earlier models. The Roadster was low-volume and priced at US$109,000. Model S and Model X targeted the broader luxury market. Model 3 is aimed at a higher-volume segment. This business strategy is common in the technology industry. According to a Musk blog post, "New technology in any field takes a few versions to optimize before reaching the mass market, and in this case it is competing with 150 years and trillions of dollars spent on gasoline cars."
Tesla's production strategy includes a high degree of vertical integration (80% in 2016 according), which includes component production and proprietary charging infrastructure. The company operates enormous factories to capture economies of scale. Tesla builds electric powertrain components for vehicles from other automakers, including the Smart ED2 ForTwo electric drive (the lowest-priced car from Daimler AG), the Toyota RAV4 EV, and Freightliner's Custom Chassis Electric Van. Vertical integration is rare in the automotive industry, where companies typically outsource 80% of components to suppliers, and focus on engine manufacturing and final assembly.
Tesla's sales strategy is to sell its vehicles in company-owned showrooms and online rather than to use a conventional dealer strategy.
Tesla's technology strategy focuses on pure-electric propulsion technology, and transferring other approaches from the technology industry to transportation, such as online software updates. Tesla allows its technology patents be used by anyone in good faith. Licensing agreements include provisions whereby the recipient agrees not to file patent suits against Tesla, or to copy its designs directly. Tesla retained control of its other intellectual property, such as trademarks and trade secrets to prevent direct copying of its technology.
Tesla Human Resources VP Arnnon Geshuri committed to bringing manufacturing jobs "back to California". In 2015, Geshuri led a hiring surge about which he said; "In the last 14 months we've had 1.5 million applications from around the world. People want to work here." Geshuri emphasizes hiring veterans, saying "Veterans are a great source of talent for Tesla, and we're going after it."
Its top selling car is the Model S, with global sales of over 197,600 units between June 2012 and September 2017, followed by the Model X with almost 59,000 units sold between September 2015 and September 2017. The Model 3 with 220 units sold during the third quarter of 2017. The now-retired Roadster sold about 2,450 units.
In 2016 BYD Auto was the world's top selling plug-in car manufacturer with 101,183 units sold, followed by Tesla with 76,243. However, Tesla revenues ranked ahead with US$6.35 billion, while BYD notched US$3.88 billion.
Also in 2016, the company sold US$1 billion worth of cars in China, the world’s largest market for electric vehicles, and in October of the following year it reached an agreement with the Chinese government to build a factory in Shanghai.
In July 2017 Tesla said their vehicles had traveled 5 billion mi (8 billion km).
As of October 2016, Tesla operated about 260 galleries or retail locations in the United States. In June 2016, Tesla opened its first store-within-a-store: a small outpost within the Nordstrom's department store at The Grove shopping mall in Los Angeles. In 2017, Tesla opened retail locations in Dubai and South Korea.
In August 2015, Tesla launched a revamp of its stores to include interactive displays focused on safety, autopilot, charging network and motors.
In 2017 Tesla had a US$52 million marketing budget and used a referral program and word of mouth to attract buyers.
Tesla operates stores and galleries—usually located in shopping malls—in many U.S. states. However, customers buy vehicles only from the Tesla website. The stores serve as showrooms that allow people to learn about the company and its vehicles. Some galleries are located in states with restrictive dealer protection laws that prohibit discussing price, financing, and test drives, as well as other restrictions.
Tesla's strategy of direct customer sales and owning stores and service centers is different from the standard dealership model in the global vehicle marketplace. Tesla is the only automaker that sells cars directly to consumers; all others use independently owned dealerships although many provide online configuration and financing. 48 states have laws that limit or ban manufacturers from selling vehicles directly to consumers, and although Tesla has no independent dealerships, dealership associations in multiple states have filed lawsuits over Tesla's sales practices.
Countries other than U.S. do not protect dealers. The Federal Trade Commission recommends allowing direct manufacturer sales, which analysts believe would save consumers 8% on average.
Under a buyback program called the Resale Value Guarantee available in 37 U.S. states, a Tesla Model S sold before July 1, 2016 included the right to return it after three years with reimbursement of 43% to 50% of its initial price. This reimbursement matched the trade-in values of competitive German luxury cars of that age. In addition to maintaining the resale value, Tesla hoped to secure a supply of used cars to refurbish and re-sell with warranty. According to Automotive News, the profit margin on used car sales in the U.S. is about triple that on new cars, and Tesla's direct sales would allow it capture resale profits. Tesla ended the program in 2016 although they retained the Residual Value Guarantee on leased vehicles.
In May 2015, Tesla started selling refurbished Model S cars in the U.S. and within a month sold 1,600 cars. As of July 2017, over 80 used Model S and Model X cars were for sale, with either a four-year, 50,000-mile warranty or a two-year, 100,000-miles warranty for vehicles above 50,000 miles. As of September 2015, similar programs existed in Canada, Austria, Belgium, Denmark, France, Germany, Britain, Netherlands, Norway, Sweden and Switzerland.
As a vertically-integrated manufacturer, Tesla has had to master multiple technology domains, including batteries, electric motors, sensors and artificial intelligence.
Unlike other automakers, Tesla does not use individual large battery cells, but thousands of small, cylindrical, lithium-ion commodity cells like those used in consumer electronics. It uses a version of these cells that is designed to be cheaper to manufacture and lighter than standard cells by removing some safety features. According to Tesla, these features are redundant because of the advanced thermal management system and an intumescent chemical in the battery to prevent fires. Panasonic is the sole supplier of the cells and cooperates with Tesla in the Gigafactory 1's '21-70' cells.
In February 2016, Tesla battery costs were estimated at US$200 per kWh. Tesla indicated later in 2016 that their batteries cost less than $190/kWh. Still later that year Argonne Labs estimated $163/kWh at a production rate of 500,000 packs per year.
The batteries are placed under the vehicle floor. This saves interior and trunk space but increases risk of battery damage by debris or impact. The Model S has 0.25 in (6.4 mm) aluminum-alloy armor plate. CTO Straubel expected batteries to last 10–15 years, and discounts using electric cars to charge the grid (V2G) because the related battery wear outweighs economic benefit. He also prefers recycling over re-use for grid once they reach the end of their useful life for vehicles. Since 2008, Tesla has worked with ToxCo/Kinsbursky to recycle worn out RoHS batteries, which will be an integral part of GigaFactory.
Tesla makes electric induction motors with three phase, four pole AC and copper rotor. Motors for the Model S and Model X are made at Tesla Factory, while motors for Model 3 are made at Gigafactory 1.
Tesla Autopilot provides semi-autonomous driver assist beginning in September 2014. Tesla replaced its sensors and software in 2016 (HW2). As of 2017, Autopilot included adaptive cruise control, lane departure warning, emergency braking, Autosteer (semi-automated steering), AutoPark (parallel and perpendicular parking) and Summon (recalling the vehicle from a parking place). HW2 became HW2.5 with summer 2017 upgrade that included a second GPU and a driver-facing camera.
HW2 includes eight cameras and twelve ultrasonic sensors, in addition to forward-facing radar.
At the end of 2016, Tesla expected to demonstrate full autonomy by the end of 2017. In April 2017 Musk predicted that in around two years drivers would be able to sleep in their vehicle.
In November 2016, the company announced the Tesla glass technology group. The group is developing glass for use in SolarCity roof tiles that were announced in October 2016. The group also manufactures the roof glass for the Tesla Model 3.
The glass roof tiles which contain an embedded solar collector are one third lighter than standard roof tiles.
Tesla offers three models, the Model S, Model X and Model 3. The firm's first vehicle,the Tesla Roadster is no longer sold.
Model S deliveries began on June 22, 2012. The first delivery in Europe took place in August 2013. Deliveries in China began in April 2014. First deliveries of the right-hand-drive model destined for the UK, Australia, Hong Kong and Japan came in 2014.
The Model S has four base configurations: the 75D (2-wheel and all-wheel), and the 100D and P100D with ranges of 335 miles and 315 miles respectively.
With an estimated 50,931 units sold in 2016, the Model S ranked as the world's best-selling plug-in car for the second year in a row. As of December 2016, the Model S was the world's second best selling plug-in electric car in history after the Nissan Leaf with over 158,000 units sold. Quarterly sales peaked in Quarter 4 of 2015.
The United States is the world's leading Model S market with an estimated 92,317 units sold through December 2016. Norway is the Model S largest overseas market, with 11,802 new units registered through October 2016. The Tesla Model S became the first electric car ever to top the monthly sales ranking in any country, when the electric car achieved the first place in the Norwegian new car sales list in September 2013.
Tesla purchased a stake in what would become Tesla Factory in May 2010 for US$42 million, and opened the facility in October 2010. For the European market, Tesla (re)assembles and distributes the Model S from its European Distribution Center in Tilburg, Netherlands. Cars are built and tested in Fremont; then, the battery pack, the electric motor and parts are disassembled and shipped separately to Tilburg, where they are reassembled.
Among other awards, the Model S won the 2013 "Motor Trend Car of the Year", the 2013 "World Green Car", Automobile Magazine's 2013 "Car of the Year", and Time Magazine Best 25 Inventions of the Year 2012 award.
The Tesla Model X is a full-size crossover SUV. Model X deliveries started in September 2015. It is offered in 5-, 6- and 7-passenger configurations. Notably, the passenger doors are artiuculating "falcon-wing" designs that open vertically.
Production was rescheduled several times, from 2013 to late 2014, to the second quarter of 2015, to the third quarter of 2015. In August 2015, user groups estimated around 30,000 X pre-orders, compared to 12,000 for the S.
Deliveries of the Model X Signature series began on September 29, 2015. Model X sales totaled 2,400 units during the first quarter of 2016, rising to 4,638 in the second quarter of 2016. Global deliveries totaled 25,312 units in 2016. The United States is its main market with 18,240 units delivered through December 2016.
The Model X ranked as the top selling plug-in electric car in Norway in September 2016. Norway was the world's first country to have all-electric cars topping the new car sales monthly ranking. Previously, the Model S had been the top selling new car four times.
The Model 3 (originally stylized as "☰") is Tesla's third-generation car. The car was originally intended to be called the Model E, but after a lawsuit from Ford that holds the trademark on "Model E", Musk announced on July 16, 2014 that the car would be called "Model 3" instead.
On March 31, 2016, Tesla unveiled the car. Potential customers began to reserve spots on March 31 with a refundable deposit. Tens of thousands were reported waiting to reserve their spot. As of April 7, 2016, one week after the unveiling, Tesla reported over 325,000 reservations, representing sales of over US$14 billion. As of July 2017, Tesla reported about 500,000 reservations.
Bloomberg News claimed "the Model 3's unveiling was unique in the 100-year history of the mass-market automobile." Bloomberg compared it to the 1955 Citroën DS that took in 80,000 deposits over 10-days at the Paris Auto Show.
The standard Model 3 delivers an EPA-rated all-electric range of 220 miles (350 km) and the long range model delivers 310 miles (500 km).
Tesla expected to invest between US$2 billion and US$2.5 billion in capital expenditures to support Model 3 production.
Limited vehicle production began in July 2017. The first 30 units were delivered at an special event on July 28, 2017.
In July 2015, Tesla announced that a Roadster successor would debut in 2019.
In October 2015, Musk described a future 'Model Y' that would be a Model 3/Model X-like cheaper crossover utility vehicle with falcon-wing doors. Tesla had trademarked the name "Model Y" in 2013. In August 2017 Tesla announced that the Model Y would use the Model 3 platform.
Musk wanted the first three models to spell "S-E-X", but settled with "S3X" because Ford owns the trademark to "Model E". Making the next vehicle the Model Y means that the model names will spell "S3XY".
Musk hopes to produce a car cheaper than the Model 3:
There will be future cars that will be even more affordable down the road . . . With fourth generation and smaller cars and what not, we'll ultimately be in a position where everyone can afford the car.
On July 20, 2016, Musk detailed his master plan for Tesla. It includes more affordable cars produced in higher volume, solar power roofs, mid-size vehicles, SUV's and pickup trucks, as well as the refinement of autonomous vehicles and the creation of a sharing economy, in which cars can be active while the owner is not using them. A Tesla Minibus would be built on the Model X platform. In May 2017, Musk indicated that he might favor a 10–12-passenger version of the Model X over a dedicated minibus design.
The Tesla Semi is an all-electric Class 8 semi-trailer truck first mentioned in the 2016 Master plan. According to Tesla they have a working prototype that uses ‘a bunch' of Model 3 electric motors. Tesla's Vice President of Vehicle Programs, Jerome Guillen leads the truck program. He was once in charge of Freightliner's Cascadia Diesel Class 8 semi.
In April 2015, the company unveiled its Powerwall home and industrial battery packs, and quickly received orders valued at US$800 million. The two models included a 7 kilowatt-hour (kWh) wall-mounted unit and 10 kWh unit. The company announced larger-scale configurations for industrial users in units of 100 kWh. The company planned to open source its patents for the entire range.
Initial cells were made by Panasonic. When production shifts to Gigafactory 1, Tesla expected costs to drop by 30%.
In September 2016, Tesla announced it had been chosen "through a competitive process" to supply Southern California Edison (SCE) with 20 MW power (and 80 MWh energy) of battery storage. In May, regulators ordered SCE to invest in utility-scale battery systems after natural gas provider Southern California Gas leaked 1.6 million pounds (730 t) of methane into the atmosphere when a well ruptured at its Aliso Canyon Natural Gas Storage Facility.
In February 2017, Musk announced plans to build three additional Gigafactories to increase its battery manufacturing.
After Puerto Rico faced a hurricane, Elon Musk offered to work with Puerto Rico's government in rebuilding its solar energy grid. In October 2017, Tesla brought 700 solar panels to the "Hospital del Niño," where the batteries helped bring care back to 3,000 patients who needed constant care.
In 2012 Tesla began building a network of 480-volt fast-charging Supercharger stations. As of November 2017, 1,032 Supercharager stations operated globally with 7,320 superchargers. The Supercharger is a proprietary direct current (DC) technology that provides up to 120 kW of power, a full charge in around 75 minutes. Tesla cars can recommend the fastest route for long-distance travel, incorporating possible charging delays.
All Tesla cars come standard with Supercharging hardware. Cars ordered after January 15, 2017 get 400 kWh of free Supercharging credits, as roughly 1,600 kilometres or 1,000 miles per year. Cars purchased before that date get free supercharging.
In December 2016, after a complaint sent to Musk via Twitter about abuse, Tesla announced that it will start charging an "idle" fee for vehicles that continue to occupy charging stations after they are fully charged.
In 2014, Tesla discreetly launched the "Destination Charging Location" Network by providing chargers to hotels, restaurants, shopping centers, resorts and other full service stations to provide on-site vehicle charging at twice the power of a typical charging location. On 25 April 2016, Tesla launched European destination charging, with 150 locations and more to be added later. Chargers are installed free of charge by Tesla-certified contractors. All installed chargers are appear in the in-car navigation system.
In addition to its corporate headquarters, the company operates multiple large factories for making vehicles and their components. The company operates showrooms and galleries around the world.
Tesla was founded in San Carlos, California. Tesla's first retail stores were in Los Angeles, in Menlo Park, California and in Manhattan's Chelsea art district, followed by others in major US cities. In 2010, Tesla moved its corporate headquarters and opened a powertrain development facility in Palo Alto.
Tesla's first assembly plant occupies the former NUMMI plant in Fremont, California. known as Tesla Factory. As of 2016 the plant was not highly automated—it was expected to produce some 80,000 cars with 6,000 workers compared to a "typical" plant that might produce 250,000 cars with 3,000 workers. The 370-acre (16,000,000 sq ft; 1,500,000 m) site includes a 5,500,000-square-foot (510,000 m) building complex.
In 2015, Tesla acquired Riviera Tool & Die (with 100 employees in Michigan), one of its suppliers of stamping items. In 2017, Tesla acquired Perbix Machine Company, a manufacturer of automated manufacturing equipment, that has been a equipment supplier for over three years.
Tesla occupies a second factory in Fremont. The building is more than 500,000 sq ft (46,500 m). The location is next to a SolarCity facility, a few miles from its Fremont plant.
Gigafactory 1 is located outside Reno, Nevada. As of January 2017 it occupied 1.9 millionsq ft (0.2 millionm) with 4.9 millionsq ft (0.5 millionm) of usable area across several floors.
It produces Powerwalls and Powerpacks as well as battery cells in partnership with Panasonic. The company anticipated that it would produce engines and drivetrains there.
The factory received substantial subsidies from local and state government.
Gigfactory 2 is located in Buffalo, New York on the site of a former Republic Steel plant. It is operated by Tesla's SolarCity unit. The factory is a $750 million, 1.2 million square foot facility that directly employs 500 workers,
Tesla partners with Panasonic to assemble photovoltaic panel modules, with plans to assemble full panels and solar roofs in 2018. As of August 2017, the factory added production of tiles for the Tesla Solar Roof.
It received incentives through the Buffalo Billion program.
Tesla's first "new design" store opened on November 16, 2012 in the Yorkdale Shopping Centre in Toronto, Ontario. As of May 2017, eight Tesla stores/galleries operated in Montreal, Quebec City, Calgary, Toronto and in Vancouver.
Tesla opened its first European store in June 2009 in London. Tesla's European headquarters are in Amsterdam. A 62,000 sq ft (5,800 m) European service center operates in Tilburg, Netherlands along with a 77,650 m (835,800 sq ft) assembly facility that adds drivetrain, battery and software to the (imported) car body to reduce EU import tax, Musk confirmed in June 2014 and November 2016 its long-term plans to build a car and battery gigafactory in Europe, which several countries have campaigned to host.
In late 2016, Tesla acquired German engineering firm Grohmann Engineering in Prüm as a new division dedicated to helping Tesla increase the automation and effectiveness of its manufacturing process. After winding down existing contracts with other auto manufacturers, Grohmann works exclusively on Tesla projects.
Tesla opened its first Japanese showroom in Aoyama, Japan.
Showrooms and service centers operate in Hong Kong, Beijing and Shanghai.
Tesla opened a showroom in Sydney in 2010. followed by a showroom and service center in Melbourne in 2015.
In July 2017, Tesla won a contract to install the world's biggest grid-scale battery in South Australia by promising installation within 100 days.
Unlike many traditional manufacturers, Tesla operates as an original equipment manufacturer (OEM), manufacturing powertrain components for other automakers. Tesla has confirmed partnerships with Daimler and Toyota. It also works with Panasonic as a partner in battery and solar panel research and development. The company supplies battery packs for Freightliner Trucks' Custom Chassis electric van.
Starting in late 2007, Daimler AG and Tesla began working together. On May 19, 2009, Daimler bought a stake of less than 10% in Tesla for a reported US$50 million. As part of the collaboration, Herbert Kohler, Vice President of E-Drive and Future Mobility at Daimler, took a Tesla board seat. On July 13, 2009, Daimler AG sold 40% of its May acquisition to Aabar Investments PJSC. Aabar is an Abu Dhabi government investment vehicle. In October 2014, Daimler sold its remaining holding.
Tesla, builds electric powertrain components for the Mercedes-Benz A-Class E-Cell, an electric car with a range of 120 mi (200 km) and 214 ft·lbf (290 N·m) of torque. The 36 kWh battery contains approximately 4,000 lithium-ion cells. 500 cars would be built for trial in Europe beginning in September 2011.
The electric motor was rated 136 PS (100 kW; 134 hp) and 310 N·m (229 lb·ft), while the 36 kWh battery. The vehicle has a driving range of 200 km (124 mi) with a top speed of 150 km/h (93 mph).
Smart ED2s have a 14 kilowatt-hours (50 MJ) lithium-ion battery and a powertrain from Tesla.
On May 20, 2010, Tesla and Toyota announced a partnership to work on electric vehicle development, which included Toyota's US$50 million future conditional investment in Tesla and Tesla's US$42 million purchase of a portion of the former NUMMI factory. Tesla cooperated on the development of electric vehicles, parts, and production system and engineering support.
On June 5, 2017, Toyota announced that it had sold all of its shares in Tesla and halted cooperation, as Toyota created their own electric car division.
Tesla and Toyota announced in July 2010 an agreement to develop a second generation of the compact Toyota RAV4 EV. A second generation RAV4 EV demonstrator was unveiled at the October 2010 Los Angeles Auto Show. Toyota built 35 of these converted RAV4s (Phase Zero vehicles) for a demonstration and evaluation program that ran through 2011. The lithium metal-oxide battery and other powertrain components were supplied by Tesla. In August 2012, the production version RAV4 EV was unveiled; the battery pack, electronics and powertrain components are similar to those used in the Tesla Model S sedan launched in June 2012, and the Phase Zero vehicles used components from the Roadster.
The company supplies battery packs for Freightliner Trucks' Custom Chassis electric van.
On January 7, 2010, Tesla and battery cell maker Panasonic announced that they would together develop nickel-based lithium-ion battery cells for electric vehicles. Naoto Noguchi, President of Panasonic's Energy Company, said that the Japanese firm's cells would be used for Tesla's "current and next-generation EV battery pack." The partnership was part of Panasonic's US$1 billion investment over three years in facilities for lithium-ion cell research, development and production.
Beginning in 2010 Panasonic invested US$30 million for a multi-year collaboration on next generation cells designed specifically for electric vehicles.
In July 2014, Panasonic reached a basic agreement with Tesla to participate in Gigafactory 1.
Tesla and Panasonic also collaborate on the manufacturing and production of photovoltaic (PV) cells and modules in Buffalo, New York.
In August 2015, Tesla partnered with Airbnb to provide destination chargers at certain host houses, initially in California.
On April 14, 2008, Tesla sued Fisker Automotive, alleging that Henrik Fisker "stole design ideas and confidential information related to the design of hybrid and electric cars" and was using that information to develop the Fisker Karma. Tesla had hired Fisker Coachbuild to design the WhiteStar sedan, but rejected the design that Musk considered "substandard". On November 3, 2008, Fisker Automotive Inc. issued a press release indicating that an arbiter had issued an interim award finding in Fisker's favor on all claims.
The company founding was the subject of a lawsuit that was later dropped after an out-of-court settlement. On May 26, 2009, Eberhard filed suit against Tesla and Musk for slander, libel and breach of contract. Musk wrote a lengthy blog post that included original source documents, including emails between senior executives and other artifacts attempting to demonstrate that Eberhard was fired by Tesla's unanimous board of directors. A judge struck down Eberhard's claim that he was one of only two company founders. Tesla said in a statement that the ruling is "consistent with Tesla's belief in a team of founders, including the company's current CEO and Product Architect Elon Musk, and Chief Technology Officer JB Straubel, who were both fundamental to the creation of Tesla from inception." Eberhard withdrew the case and the parties reached a final settlement. One public provision said that the parties will consider Eberhard, Musk, Straubel, Tarpenning and Wright to be the five co-founders. Eberhard issued a statement about Musk's foundational role in the company: "As a co-founder of the company, Elon's contributions to Tesla have been extraordinary."
In early 2014, Tesla reportedly tried to break the exclusivity agreement their charging partner in the UK had for locations along the UK's highways; Ecotricity replied by taking an injunction against them. The dispute was resolved out of court.
Tesla unsuccessfully sued British television show Top Gear for its 2008 review of the Roadster in which Jeremy Clarkson could be seen driving one around the Top Gear test track, complaining about a range of only 55 mi (89 km), before showing workers pushing it into the garage, supposedly out of charge. Tesla filed a lawsuit against the BBC for libel and malicious falsehood, claiming that two cars were provided and that at any point, at least one was ready to drive. In addition, Tesla said that neither car ever dropped below 25% charge, and that the scene was staged. The High Court in London rejected Tesla's libel claim. The falsehood claims were later struck out. The Top Gear website posted a favorable review of the Model S in 2015 and featured the Model X favorably in 2016.
In early 2013, Tesla approached the New York Times to publish a story "Focused on future advancements in our Supercharger technology". In February 2013, the Times published an account on the newly installed Supercharger network on freeway between Boston and New York City. The author describes fundamental flaws in the Model S sedan, primarily that the range was severely lowered in the below-freezing temperatures of the American Northeast. At one point the vehicle died completely and needed to be towed to a charging station.
After the story was published, Tesla stock dipped 3%. Three days later, Musk responded with a series of tweets, calling the article "fake", and followed up with a lengthy blog post disputing several of the article's claims. He called it a "salacious story" and provided data, annotated screenshots and maps obtained from recording equipment installed in the press vehicle as evidence that the New York Times had fabricated much of the story.
[...] Instead of plugging in the car, he drove in circles for over half a mile in a tiny, 100-space parking lot. When the Model S valiantly refused to die, he eventually plugged it in.
In a statement, the Times stood by the accuracy of the story, calling it "completely factual". Author John Broder quickly issued a rebuttal in which he clarified and rejected many of the accusations made by Musk.
[...] I drove around the Milford service plaza in the dark looking for the Supercharger, which is not prominently marked. I was not trying to drain the battery. (It was already on reserve power.) As soon as I found the Supercharger, I plugged the car in.
During further investigation by the media, Musk said "the Model S battery never ran out of energy at any time, including when Broder called the flatbed truck." Auto blog Jalopnik contacted Rogers Automotive & Towing, the towing company Broder used. Their records showed that "the car's battery pack was completely drained." In his follow-up blog post, Broder said "The car's display screen said the car was shutting down, and it did. The car did not have enough power to move, or even enough to release the electrically operated parking brake."
In the days that followed, NYT public editor Margaret Sullivan published an opinion piece titled "Problems With Precision and Judgment, but Not Integrity, in Tesla Test". She concludes "In the matter of the Tesla Model S and its now infamous test drive, there is still plenty to argue about and few conclusions that are unassailable." No legal action was pursued.
In early March 2016, a report by Stuff magazine said that test performed by VICOM, Ltd on behalf of Singapore's Land Transport Authority had found a 2014 Tesla Model S to be consuming 444 Wh/km (0.715 kW·h/mi), which was greater than the 236 watt-hours per kilometre (0.38 kW·h/mi) reported by the U.S Environmental Protection Agency (EPA) and the 181 watt-hours per kilometre (0.291 kW·h/mi) reported by Tesla. As a result, a carbon surcharge of S$15,000 (US$10,900 at March 2016 exchange rate) was imposed on the Model S, making Singapore the only country in the world to impose an environmental surcharge on a fully electric car. The Land Transport Authority justified this by stating that it had to "account for CO2 emissions during the electricity generation process" and therefore "a grid emission factor of 0.5g/watt-hour was also applied to the electric energy consumption", however Tesla countered that when the energy used to extract, refine, and distribute gasoline was taken into account, the Model S produces approximately one-third the CO2 of an equivalent gasoline-powered vehicle.
Later that month, the Land Transport Authority released a statement stating that they and the VICOM Emission Test Laboratory will be working with Tesla engineers to review the test, and a Tesla statement indicated that the discussions were "positive" and that they were confident of a quick resolution.
The July 11, 2016 Wall Street Journal reported that Tesla was being investigated by the U.S. SEC to see if the company should have disclosed a fatal crash involving its autopilot technology before the company sold more than US$2 billion worth of shares in May 2016. A separate SEC investigation closed "without further action" in October 2016 about Tesla's use of non-GAAP (Generally Accepted Accounting Principles) reporting; Tesla switched to GAAP-reporting in October 2016.
In September and October 2016, seven Delaware lawsuits were filed by Tesla stockholders seeking to block the proposed SolarCity acquisition. In October 2016, the Court consolidated the actions and appointed a lead plaintiff. The plaintiffs alleged, among other things, that the Tesla board of directors breached their fiduciary duties in approving the acquisition and that certain individuals would be unjustly enriched by the acquisition. The acquisition was approved by Tesla and SolarCity's stockholders on November 17, 2016 and the merger closed on November 21, 2016.
On April 19, 2017, Tesla owners filed a class-action lawsuit due to Tesla exaggerating the capabilities of its Autopilot 2 to consumers. The lawsuit claimed that "buyers of the affected vehicles have become beta testers of half-baked software that renders Tesla vehicles dangerous if engaged" Tesla attacked the lawsuit as a "disingenuous attempt to secure attorney's fees posing as a legitimate legal action".
On April 19, 2017, Tesla factory workers filed unfair labor practice charges with the National Labor Relations Board, alleging that Tesla uses "illegal surveillance, coercion, intimidation and prevention of worker communications [...] in an effort to prevent or otherwise hinder unionization of the Fremont factory."
According to CNBC, "the United Automobile Workers (UAW) union filed four separate charges with the National Labor Relations Board alleging that [Tesla] has illegally surveilled and coerced workers attempting to distribute information about the union drive." On February 10, 2017, three Tesla employees allegedly were passing out literature to initiate organizing union efforts. The literature pointed to working conditions, the company's confidentiality agreement and employee rights under the National Labor Relations Act. The UAW's charges allege that Tesla illegally told employees that they could not pass out any literature unless it was approved by the company.
Employees describe working at Tesla as stressful and meaningful. In 2016, Tesla's employees averaged 30 years age, and 20% were female.
On May 14, 2017, Tesla said that Total Recordable Incident Rate (TRIR, a measure of employee safety) was higher for the previous years, and stated a TRIR of 4.6 for Q1 2017. On May 18, 2017 The Guardian published a story about working conditions at Tesla Factory, relayed by CNBC.
Former and current Tesla employees publicly expressed concerns about worker treatment. Between 2014 and 2017, ambulances went to Tesla’s Fremont, California factory over 100 times to provide emergency services to workers exhibiting symptoms including fainting, dizziness, abnormal breathing and chest pains resulting from the physically demanding tasks associated with their positions. At the end of that period, Tesla Factory employed over 10,000 workers.
Working conditions are in part a result of the company's ambitious production figures. The 2018 goal is to manufacture 500,000 automobiles, a 495% increase from 2016. Tesla has acknowledged that its recordable incident rate (TRIR), which measures work-related injuries and illnesses that have been reported to regulators, exceeded the industry average between 2013 and 2016. Exact data was not released by Tesla over that period, because the company says the data is not representative of the factory's current operations.
Musk strongly defended Tesla’s safety record and argued that the company had made significant improvement. In 2017, however, when The Guardian reached out to 15 current and/or former workers, each contradicted Musk’s viewpoint. Jonathan Galescu, a production technician for the company, said, “I’ve seen people pass out, hit the floor like a pancake and smash their face open. They just send us to work around him while he’s still laying on the floor.” In February 2017, Jose Moran, a Tesla worker, blogged about the company’s practices of mandatory overtime, frequent worker injuries and low wages.
Tesla’s policies for dealing with injured employees were also criticized. In 2017, workers alleged that Tesla’s policies got in the way of workers reporting injuries. At Tesla, workers who reported injuries were moved to lighter work and given access to supplemental insurance benefits. One injured worker reported that his pay went from $22 an hour to $10 an hour. In order to protect their incomes, many workers choose to work during their recovery from injury, in some cases inciting further damage and pain.
In 2017, Tesla added extra shifts and safety teams to improve conditions. When CNBC requested comment about the issues, Tesla responded, “Tesla’s safety record is much better than the industry average, but it is not enough. Our goal is to have as close to zero injuries as humanly possible and to become the safest factory in the auto industry.”
On May 24, 2017, California Worksafe responded to Tesla's TRIR numbers, showing higher rates (8.8) than industry average (6.7) for 2015.
Certain Tesla vehicles equipped with its Ludicrous performance mode had limited power output, as discovered by some Tesla owners in 2017. The power limits were connected to how frequently the drivers used Launch Mode; if a driver used it too much, the car’s power output was restricted to prevent excessive wear and tear on components. Customers complained and the company removed the limiter.
The Mercury News in 2016 investigated the use of foreign construction workers to build Tesla’s paint shop at Tesla Factory. A whistleblower federal lawsuit was filed, which was unsealed in the summer of 2017. The suit alleged that Tesla and other major automakers such as Mercedes-Benz, BMW and Volkswagen illegally used foreign construction workers to build their U.S. factories. Court documents and the journalistic investigation showed that at least 140 foreign workers worked on the factory expansion, some of whom had questionable work visas, for as little as five dollars per hour. The workers came mainly from Eastern Europe on “suspect visas hired through subcontractors.”
As of April 2017, Tesla had issued five product recalls for the Model S, two for the Roadster, and two for the Model X.
On April 20, 2017, Tesla issued a worldwide recall of 53,000 (~70%) of the 76,000 vehicles it sold in 2016 due to faulty parking brakes that may become stuck and "prevent the vehicles from moving."
On October 1, 2013, a Model S caught fire after the vehicle hit metal debris on a highway in Kent, Washington. Tesla confirmed the fire began in the battery pack and was caused by the "direct impact of a large metallic object to one of the 16 modules within the Model S battery pack." On November 6, 2013, a Tesla Model S on Interstate 24 near Murfreesboro, Tennessee, caught fire after it struck a tow hitch on the roadway, causing damage beneath the vehicle. Tesla said that it would conduct its own investigation, and as a result of these incidents, announced its decision to extend its current vehicle warranty to cover fire damage.
On January 4, 2014, a Tesla Model S in Norway caught fire while charging at one of Tesla's supercharger stations and was completely destroyed. No one was injured.
On March 28, 2014, NHTSA announced that it had closed the investigation into whether the Model S was prone to catch fire, after the automaker said it would provide more protection to its battery packs. All Model S cars manufactured after March 6 have the .25-inch (6.4 mm) aluminum shield over the battery pack replaced with a new three-layer shield.
A Model S driver died in a collision with a tractor-trailer on May 7, 2016, in Williston, Florida, while the vehicle was in autopilot mode. The driver is believed to be the first person to have died in a Tesla vehicle in autopilot mode. The NHTSA investigated the accident and concluded: "A safety-related defect trend has not been identified at this time and further examination of this issue does not appear to be warranted."
On June 4, 2017, the American Automobile Association raised insurance rates for Tesla owners following a report from the Highway Loss Data Institute. The report concluded that the Model S crashes 46% more often and is 50% more expensive to repair than comparable vehicles. Similarly, the Model X was concluded to crash 41% more often and to be 89% more expensive to repair than similar vehicles. As a result, AAA raised insurance rates on Tesla cars by 30%. Tesla said that the analysis is "severely flawed and not reflective of reality", however, Tesla failed to provide any contradictory numbers. Shortly thereafter, Russ Rader, the spokesman for the Insurance Institute for Highway Safety, confirmed the AAA's analysis and that "Teslas get into a lot of crashes and are costly to repair afterward". Tesla has not made further statements on this topic.
Tesla has been criticized for repeatedly overpromising and underdelivering. Delivery dates for new vehicles and new vehicle features slipped on the Roadster, the Model S and the Model X. Advanced technologies like the prospect of a large network of solar-powered supercharger stations (first installed 2012; only two were solar-powered as of late 2014) also lagged projections.
In early October 2017, Musk had predicted that Model 3 production would be up to 5,000 units per week by December. A month later, he revised that target to "sometime in March" 2018 due in part to difficulties with robots on the assembly line, but primarily due to problems with the battery module. An analyst with Cowan and Company, a public relations firm, made this comment: "Elon Musk needs to stop over promising and under delivering".
In August 2015, two researchers said they were able to take control of a Tesla Model S by hacking into the car's entertainment system. The hack required the researchers to physically access the car. Tesla issued a security update for the Model S the day after the exploit was announced.
In September 2016, researchers at Tencent's Keen Security Lab demonstrated a remote attack on a Tesla Model S and controlled the vehicle in both Parking and Driving Mode without physical access. They were able to compromise the CAN bus when the vehicle's web browser was used while the vehicle was connected to a malicious Wi-Fi hotspot. This was the first case of a remote control exploit demonstrated on a Tesla. The vulnerability was disclosed to Tesla under their bug bounty program and patched within 10 days, before the exploit was made public. Tencent hacked the doors of a Model X in 2017.
Tesla offers service at their service centers, or if a center is not available, mobile technicians can perform most inspections and repairs. It is recommended to have any Tesla car inspected every 12,500 miles or once a year, whichever comes first. The first units for each new model revealed design and manufacturing flaws, including the Model S and the Model X. As the Tesla vehicle fleet grew, limited service centers resulted in waiting periods for some owners. Auto experts view the service delays as insignificant, as owners are more accepting of the challenges of servicing a new type of car.
Tesla does not provide service manuals except in jurisdictions that required them to do so.
In June 2017, Tesla made a "last-minute push near the end of the Albany legislative session to expand its sales force in New York." However, Tesla and the legislature got pushback from the auto dealers. A New York State Legislature bill (A.8248/S.6600) would allow Tesla to operate 20 sales locations in the state, up from its current 5. The dealers attacked the bill, arguing that it would hurt their business because Tesla does not sell through dealers. According to the New York Law Journal, "Tesla . . . has its own in-house lobbyists, according to disclosures filed with the state's lobbying entity."
As of October 2017, the Tesla board of directors consists of:
A group of investors asked Tesla in a 2017 public letter add two new independent directors to its board “who do not have any ties with chief executive Elon Musk”. The investors wrote that “five of six current non-executive directors have professional or personal ties to Mr. Musk that could put at risk their ability to exercise independent judgement.” The letter called for a more independent board that could put a check on groupthink. At first Musk responded on Twitter, writing that the investors "should buy Ford stock" because "their governance is amazing.” Two days later, he promised he would add two independent board members.