The initial product of Tesla Motors was a high performance electric sports car called the Tesla Roadster. I'll give you the reasoning why we did start with the car that we did start with. There are certain things that I thought were important to happen, so that the electric vehicle happened. That there was a success in the electric vehicle arena. The incumbent companies were convinced that it was not possible to create an electric car that looked good, had a good range, performance and so forth. But even if you did make such a car that it would not sell, because people had this love of gasoline. Some had programs, but those programs for the most part were I would say almost entirely quite low volume, and more inclined towards satisfying regulators.
So, we just decided to make a car that's pretty hard to ignore. Whereas discussions or Powerpoint are much easier to ignore, everything does work on Powerpoint so there is reason for skepticism there. But having an actual car, one that is fully homologated for use on the roads and meets all the safety standards and everything, was really important.
The previous electric cars had not been compelling, they had been kind of like golf carts, and it just wasn't true that an electric car had to be these sort of ugly, slow-moving golf carts. We had to show that it was possible to create a compelling electric car. We needed to show people that an electric car could in fact be the best car, and if you made such a thing that people would buy it. The point of Tesla was to make a viable electric car that broke the paradigm of what people thought of as an electric car.
Critical to making that happen was an electric car without compromises. In order to be successful it had to have sex appeal, great acceleration, great handling, long-range, you know all those things. Those things were really important to fundamentally change the perception. While some people are willing to buy a car that is good for the environment even if it's worse, for most people it was much easier if it also happened to be the best car. So we did the Tesla Roadster.
It was a little rough going in the beginning. We had so many challenges with the Roadster, pretty much everything went wrong. Not the hard stuff, but the stuff that is sort of theoretically easier.
The first thing we did was sort of create a test mule. We still have the original mule One of Tesla Roadster. Our very first mule was really taking a Lotus Elise, jamming an AC Propulsion power train into it, and then making it drive.
This is a point that may be helpful to entrepreneurs out there that are creating companies. The reality is that the creation of Tesla was based on two fundamentally false premises. That turned out in retrospect staggeringly dumb. One was that we would be able to use a slightly modified Lotus Elise, add the Tesla battery pack, and an electric power train using AC propulsion system technology, and then be done, and get to market fast with an electric car. In reality when you convert a car to electric, and you want to make it something that passes all of the federal safety standards and all the legalities for the regular car, you invalidate all of the crash tests. The battery pack ended up being too big and we had to stretch the chassis. We couldn't use the air-conditioning system because that was previously run off the engine power. So we needed to have a new AC system, create a new wiring harness, all new suspension, and all new brakes, because the car was 30% heavier.
It actually ended up costing us way more to convert the frame designed for a gasoline car to electric then if we just designed something from scratch. Then the other part was that we licensed much of the technology from AC propulsion, which turned out that none of that was actually producible, it was really difficult to manufacture. As it turned out, the AC Propulsion power train didn't really work very well, and was not scalable for production - had a lot of issues - and so we had to completely redesign the power train. Then because our car ended up being 50% heavier and had different weight distribution and low points, we invalidated all the crash structure and had to completely redesign the chassis. In the end I think about 7% of the parts were in common with the Elise, almost nothing, but we actually inherited some of the limitations of the Elise. It's like if you have a particular house in mind that you want to build, instead of building that house from a fresh start, you take some existing house and you end up modifying everything except one wall in the basement. So, in the end only 6 or 7% of the Tesla Roadster had parts in common with any other car period. On the other hand if we had to do everything from scratch maybe we would not have started the company. Ultimately I think it took five times the amount of capital to bring the Roadster to market and iron out the issues.
Then we needed to get to an actual Roadster prototype as a production design. So we redesigned the body. I was basically the chief designer of the body. My two favorite cars were the McLaren F1 and the Porsche 911, so there are sort of elements of that in the design. I don't think I'm a good designer by the way. It's actually relatively easy to design a sports car that looks good, because the proportions naturally lend itself to excitement and beauty. It’s incredibly hard to design a sedan that looks good.
The Roadster was designed to beat a gasoline sports car like a Porsche or Ferrari in a head to head showdown. We didn't want to create another DeLorean. The DeLorean looked kind of cool, but it was really weak on performance, it was unreliable, and there were lots of little issues with the car. We just didn't want to be in that situation.
We managed to make the first deliveries of the Tesla Roadster in 2008. The rule at Tesla is whoever puts down the deposit for the car first, that's their order in line. I put down the first deposit for the first Roadster, Roadster number one, the first production which was fully department of transport legal and everything, and it got delivered I think in February 2008.
Frankly, although this car passed all the regulatory requirements to pass as a street legal car, it was completely unsafe. It broke down all the time. I remember in the early days giving a test drive to Larry Page and Sergey Brin, who are good friends of mine, I’ve known them actually for a really long time. There was like some bug in the system and dammit the car would only go 10 miles an hour, I was like:"I swear guys it goes way faster than this" but they were kind enough to put a little investment into the company nevertheless, despite the world's worst demo.
We were able to fix those and get production ramped up. We worked superhard to make the car compelling as to make it a no-brainer to buy an electric car. We put so much effort into achieving that objective.
The Tesla Roadster was the worlds first mass-produced highway capable electric car. It was really quite historic. This may sound strange, but there has actually never been a mass-produced electric car outside of golf carts. I actually think it's sort of slightly sad that it was the first production electric car out of the modern era, and there were not more electric cars on the road.
The elevator speech thing was: “The Tesla Roadster is faster than a Ferrari and more efficient than a Prius.” It actually had a better acceleration than any Ferrari except the Enzo. Zero to 60 in a 3.9 seconds, it beat any Aston Martin or Ferrari in acceleration. In fact, on the Tokyo test track our standard Roadster beat a Porsche TT3. The really sort of million-dollar super cars, obviously those will beat it, but it was pretty much faster than any normal sports car, and it was really easy to drive.
The responsiveness of the car was really incredible. We wanted really to have people feel as though they've almost got to mind-meld with the car, so you just feel like you and the car are kind of one, and as you corner and accelerate, it just happens, like the car has ESP. You can do that with an electric car because of its responsiveness. You can't do that with a gasoline car. I think that's really a profound difference, and people only experience that when they have a test drive. It's got like a cool sort of subtle kind of jet turbine sound, because the motor goes up to 40,000 RPM. Also you can accelerate really fast, like let's say you're at a stoplight, you can take off and you can floor it and not seem like a jackass.
The early proto Roadsters that we had were vehicle-to-grid. You do get a lot of complications with that if you back flow power through the car into the wall. Like when is the car allowed to do that, when is it not and then how much do you allow the car battery to be drawn down? and then people, I think, would be pretty upset if the lights are on in the house, but they can’t drive their car because all the power in the house shuts down. I think the right solution is to decouple it.
If you wanted a high performance car with a clean conscience, this was the only option. In fact, although the Roadster was a fast sports car, it used less energy per mile than a Prius. In fact, the battery pack only had the equivalent of two gallons of gasoline worth of energy. Even if you took power from a coal power plant, so it’s entirely coal and you took into account transmission losses and charging losses and so forth, and say how much CO2 you generate per mile, it was still less than a Prius, because stationary power plants being quite energy-efficient. Even if 100% of electricity came from coal, the Roadster produced less CO2 per mile then a Prius, and had twice the energy efficiency of a Prius.
The Roadster's greatest value was really breaking the misconceptions around electric cars. Showing that you can have a cool electric car that goes long distances, almost 250 miles without a charge. That was longer than any electric car in history, in fact the Roadster set many world records in terms of its range. We had one customer take it over 300 miles on a trip. There's actually two customers. One was a rally in Australia, which is technically 500 km, and it was the first time that an electric car finished that rally without recharging, and another one was in Europe.
The biggest impact of the Roadster was in changing the perception of what an electric car can be, and showing that you can do amazing things with an electric car. That they are better than gasoline cars in a lot of respects. We were able to disprove those axiomatic errors. We were able to show that by making a sports car that was aesthetically pleasing, high-performance, very fast, great handling, long range—as much range as you’d get from a gas tank—that really helped break people’s perception of what an electric car could be, and if you made such a car people would buy it. We were able to change peoples minds one by one by giving them a test drive.
It still took a long time. Nobody had heard of the company, they thought Tesla was a rock band, or if you're a scientist Nikola Tesla of course. By the way those guys are awesome, they have been huge supporters all along. They never bugged us that we like used their name or anything, so rock on Tesla the band.
The Roadster had a powerful catalytic effect in that when Bob Lutz, the chairman of General Motors at the time, saw our press release, took our press release, went down to his development team and said: “if a little company can do this why can't we?” He’s told the story many times, his engineers told him that you couldn't build an electrical car, and he told them that they needed to get going, because if a small company in California can do it, so can GM. That is what got General Motors to do their electric vehicle program. I really like Bob Lutz by the way, I actually agree with most of the things that Bob says, and I have a lot of respect for Bob. I just want that to be clear because sometimes people may sort of make out that somehow I don't like Bob, but I actually I have a tremendous amount of respect for Bob. I think Bob articulated it well which is that we have a vast number of vehicles that are gasoline. We need to make, therefore, a vast number of compelling electric vehicles; just building up that production line and switching out the install base will take decades, so we will have an addiction to oil for some period of time. The question is really, can we minimize that time, and in doing so minimize the potential damage to the environment.
At the time GM used to be the world’s largest car company, and when the world’s largest car company announces they’re going to go do an electric vehicle program, others tend to follow. It in turn encouraged the other manufacturers to do electric vehicle programs as well. That’s what really got the Chevy Volt rolling, in fact, Bob credits Tesla with the inspiration for the Volt. That in turn got Nissan to do the Leaf.
So the Tesla Roadster kind of got things going. Ultimately it is what we induce other companies to do that will have a greater impact than the cars we make ourselves.