Tesla #1: Secret Master Plan

Tesla, the electric car company. It was founded in 2003 and named after the inventor, Nikola Tesla. In 2004, Elon Musk became its biggest investor. As the company’s ambitions grew, Musk would take over. In 2006, he published the company’s “secret master plan” in a company-wide blog:

“In short, the master plan is:

1) Build sports car

2) Use that money to build an affordable car

3) Use that money to build an even more affordable car

4) While doing above, also provide zero emission electric power generation options

Don't tell anyone.”

 

As I read Tim Higgins’ wonderful biography of the company, I think this can be the 0ne-line summary of the book: Tesla executed that “secret master plan”.

 

In his typical bombastic style, Musk claimed that the intent of the company was to “help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy”. Why then start with a sports car, you ask (Step 1 of the secret master plan above). Why not build the mass market version (Step 3)?

 

Well, for one, Tesla had no experience of building any kind of car. Second, creating a mass market car company would take huge amounts of money. Third, the relevant suppliers didn’t exist, at least not on a mass market scale. Fourth, the charging stations didn’t exist. Fifth, customers didn’t know what to expect in an electric car.

 

As Higgins says:

“Belief created the vision; the vision created a market; the market would create cash; and cash would create cars. (Musk) just had to do it on an unimaginable scale.”

And as if that wasn’t hard enough:

“It’s something else entirely to stare down some of the biggest companies in the world and to challenge them on their turf, with something they’ve been learning to make – often painfully – for over a century.”

 

But Musk was probably the right guy to take on such a challenge:

“Musk has carved out a decided brand advantage. He has almost singlehandedly created the contemporary electric car zeitgeist. He embodies it. To many, he is it.”

 

And as the book points out:

“While Musk’s vision, enthusiasm, and determination carry Telsa; his ego, paranoia, and pettiness threaten to undo it all.”

 

In the next set of blogs, we’ll see how Tesla went about it.