On a late July afternoon in 2003 an electric car powered by the sun and built by Stanford students rolled across the baking Mojave Desert, headed for Los Angeles. Stanford’s entry that year in the biennial American Solar Challenge race, the car—resembling a ground-hovering spaceship—traveled up to 60 miles per hour on roughly the same energy needed to run a hair dryer.
The car finished 15th in the race, which had started in Chicago several days earlier. But the student engineers from Stanford were too pumped up to care. That night, they gathered at a house in L.A. rented by former team member J.B. Straubel, ’98, MS ’00. Although they’d had little sleep for the past week, everybody stayed up until morning scribbling calculations on white boards and stray napkins. “It dawned on us that with a larger lithium-ion battery, you could have actually run this car without a solar array for the whole race,” Straubel recalls. “We were thinking about how to apply this to the real world.”
A few months later Straubel had lunch with PayPal founder Elon Musk and helped persuade the young entrepreneur to invest $4 million in a startup company that eventually became Tesla Motors.
The first product of the now 5-year-old company is about to be unveiled—an electrically powered two-seat sports car that can go from zero to 60 in four seconds, reach a top speed of 120 miles per hour and run for more than 200 miles on a single charge. Customers like Arnold Schwarzenegger and Google founders Sergey Brin, MS ’95, and Larry Page, MS ’98, paid a $100,000 deposit to reserve their Roadsters more than a year ago. If all goes as planned, they should get them by this spring.
The Roadster is not directly an extension of the Stanford Solar Car Project, but the project’s engineering provided a template for some key technology. “Almost every critical piece of this car can be traced back to someone from Stanford,” says Straubel, who became Tesla’s chief technology officer and “basically hired all my friends.” Some 40 Stanford alums work at Tesla’s headquarters in San Carlos, Calif.
Powering a car with electricity puts a premium on efficiency. The solar car team knew a lot about that because their vehicle was running on a tiny amount of juice. Using techniques learned on their college project, the Tesla engineers found ways to minimize aerodynamical drag and limit tire resistance. But whereas the Stanford solar car was designed with just enough room for a driver, and tires about the width of a bicycle’s, the Roadster would need all of the space and amenities one expects in a luxury sports car. Propelling that additional weight required additional thrust. Answer: bigger batteries.
The Roadster battery pack is a much-evolved version of the one that powered the student-built car, Straubel says. It has 6,831 lithium-ion cells, each the size of a stick of lip balm, and weighs 1,000 pounds. It also comes with critical features lacking in the solar car, such as sophisticated monitoring technology. It’s been put through extensive testing to prevent short circuits, corrosion and vibration—a challenge for a half-ton load traveling at high speeds.
The rap on electric cars to date has been that they could deliver neither the range nor the performance of a combustion-engine vehicle. Tesla set out to disprove that. Gene Berdichevsky, ’05, a principal engineer on the battery pack, sometimes drives a prototype to his home in downtown San Francisco. He says the Roadster’s acceleration snaps your head back. “There is absolutely no car in Silicon Valley that will beat you from zero to thirty.”
In fact, the Roadster’s snappy acceleration is one of the reasons the car’s initial projected 2007 release was delayed—engineers needed to perfect the transmission. “It’s got such good start power response that it’s actually harder on the transmission than a gas engine,” explains Musk, Tesla’s chair.
As battery technology improves, the size of the battery pack should shrink, enabling further innovation and cost savings, according to Tesla’s engineers. The company aspires to build a $50,000 sedan by 2010 and a $30,000 economy car a year or so later. To do so, it plans to leverage the technology and platform developed for the Roadster. Investors have ponied up $105 million so far, $37 million from Musk alone.
The startup’s brash ambitions make some industry observers scoff. “I wouldn’t call it Tesla Motors yet. I would call it the Tesla prototype company,” says James Hall, vice president of industry consulting firm AutoPacific, in Southfield, Mich. “My concern is that there are people in charge who don’t have a realistic view of the car industry.”
Hall estimates Tesla will need 30 to 40 years to turn a profit and $700 million immediately to successfully develop and mass produce a lower-priced model. Traditional automakers typically spend between $500 million and $1 billion to put out a new car—and that’s without building a company from scratch first.
Musk calls Hall’s thinking generic and conventional. “I will eat my hat if we spend anything close to $700 million on our model-2 car,” he says.
Ultimately, Tesla’s value may come more from the engineering under its hood than from its cars. It expects to sell power train technology to automakers worldwide in much the same way Porsche does. Musk says he is in “serious” negotiations with four large carmakers, here and abroad, interested in Tesla’s technology.
To hear them tell it, Tesla’s executives aren’t particularly concerned about beating other carmakers. They’re out to inspire change, not dominate the market, they say. “The long-term goal is to transform the whole transportation industry, not just make better sports cars,” Straubel says.
When General Motors Vice Chairman of Global Product Development Bob Lutz first saw a Tesla press release several years ago, he was both irked and impressed. “How come we can’t do that?” he asked his colleagues. Lutz—who calls the Tesla people “courageous pioneers”—subsequently green-lighted development of a hybrid electric car. GM says its Chevrolet Volt will be in showrooms by 2010, about the same time as Tesla’s $50,000 sedan, code-named White Star.
What if GM gets there first? That’s fine with Tesla engineer Dorian West, ’96, MS ’98. “If some other automakers get a hint and catch up to us, then so be it.”
