Published on February 10th, 2019 | by Carolyn Fortuna
February 10th, 2019 by Carolyn Fortuna
Every once in a while, we get a chance to learn while also having a good time. That’s often what happens when we click onto “YouTube University,” which teaches us how to fix our broken appliances, reveals nuances of a topic that confuses us, replays news stories — and so much more. When I came across the YouTube video “The History of Tesla in 5 Minutes,” the pithy title immediately caught my attention. Tesla, a company with so many intricacies and complexities, in 5 minutes? Really? I was drawn in.
The “History of Tesla in 5 Minutes” outlines 3 themes as it chronicles a brief review of the Tesla story from inception to today.
- Lithium ion (Li-ion) battery technology must constantly improve so EVs can become the most popular transportation power choice.
- EVs are only the start to the world’s eventual transition to sustainable energy.
- Economies of scale — a proportionate saving in costs gained by an increased level of production — are necessary for sustainable energy to be viable.
5 Minutes to Narrate the Tesla Lifetime
The video begins with a nod to GM’s 2003 “groundbreaking” EV that had a “loyal following” and whose “spark” ended abruptly. The imagery of a bagpiper playing a funeral dirge and a teary female with a pillbox hat and handkerchief (Jackie Kennedy allusion?) punctuates the “mock funeral” they hold, bemoaning GM’s claim that “there was not enough demand to keep the EV dream alive.” GM took any remaining EVs to the desert and “crushed them under the scorching sun.” It was a “defining moment” and “early setback for EV movement,” yet others saw the GM miscalculation as a “catalyst for rebirth” of electric vehicles.
What followed was the “inspired the creation of Tesla Motors” by two Silicon Valley engineers, Martin Eberhart and Mark Terpening, who sold their e-book business for $187 million to fund a new project. They “started Tesla to build a greener car.”
Elon Musk joined as an early investor and “led the Series A financing.” The video outlines that “Tesla’s plan was simple but potential genius:”
- Focus on lithium-ion batteries.
- Start with a high-margin high-performance sports car.
- Achieve economies of scale “so Tesla could target other segments like Semi trucks” and “integrate energy generation and storage in the home and develop other emerging technologies like autonomous vehicles.”
So, the company set off to to a build high-performance sports car.
As the new company attempted to “reduce complex manufacturing,” it “began customizing more and more parts,” which led the company to the “verge of bankruptcy.” Times were tough at Tesla then, and “several CEOs came and went.” Elon Musk “took the job” in 2008 and “made drastic changes to save the company.”
- Cut workforce 25%
- Recalled 75% of the Roadsters
- Raised $40 million in debt financing
- Formed a strategic partnership with Daimler
- Borrowed $465 million from the US government
As a result of the cost-cutting and narrowed manufacturing focus, 2,450 Roadsters were made. The Roadster “became springboard for EV revolution” with its 992 lithium-cobalt-oxide battery and 244 mile range.
Fast forward to 2010, when “Tesla IPODd on the NASDAQ, raising $226 million.” The video is ebullient about the Tesla success, preening, “it was the first American car company to go public since Ford in 1956.” But the video relates quickly that the company didn’t stop there. The company had “aimed for a wider market” with its upcoming Model S and Model X but “seemed limited by high cost of lithium-ion batteries. After all, if batteries were too expensive, EVs could never compete with gas on price, as they would never be mainstream.”
Elon Musk had an epiphany: “to combat this,” he devised “ambitious plans for the Gigafactory” that would allow Tesla “to reach economies of scale in lithium-ion battery production” and “ultimately make EVs cheaper than gas-powered autos.”
As Tesla built its Gigafactory, “it hit many other milestones:”
- “semi-autonomous capabilities”
- “a lithium-ion battery for the home”
- “Model 3 car for the masses”
A few years pass, and, “by the end of 2017, Tesla passed Ford in market value — just 7 years after its IPO.”
Tesla’s ambitions are outlined in the final 2 minutes of the video: the “mission to accelerate the world’s transition to sustainable energy” and a “strategy to productize the factory so that vehicle assembly can be automated at a revolutionary pace.”
Acknowledging that “Tesla knows that building a few electric cars won’t make a dent in the global energy picture,” the video says that company is “using its factory tech to go bigger and better.”
- Its goals include the Tesla Semi, which “will go from 0-60 with 80,000 payload in just 20 seconds.”
- The long-haul truck is not the only larger vehicle that Tesla has in mind, for “Musk also says he wants to build a pickup truck and EVs for high density urban transport.”
- The “Model Y will be a crossover built on the Model 3 platform” as an “ultra low cost model” that “will need a bigger and better Gigafactory.”
- “Tesla also wants to change the entire energy paradigm by popularizing an ecosystem that allows homeowners to run their appliances and cars off green energy and even sell it back to the grid.”
The fun little video muses that this will only become a reality if Elon Musk and Tesla “can perfect the building of the machine that builds the machine.” A question hangs at the end: “Will Tesla achieve their ambitious goals?”
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