Tesla certainly made its name thanks to Elon Musk, but the company originally had five founders. Curiously, not all of them have become relevant as some of the richest men in the world.
On a July 2006 afternoon, newly founded electric car maker Tesla gathered reporters in a Santa Monica Airport hangar to reveal the launch of its roadster model: an audacious two-seater battery-powered vehicle costing $100,000. Due to this very controversial but yeat audacious choice, just a few automotive experts have seen hopes of success. The company’s bold CEO, Martin Eberhard, declared that Silicon Valley’s ingenuity would teach Detroit’s auto giants how to make attractive zero-carbon cars.
Tesla’s first launch, which featured a modified Lotus Elise chassis with 7,000 tiny lithium-ion cells, was a sophisticated concept. It was followed by a low-cost family sedan. This month, Tesla became the first automaker to reach a staggering $1 trillion valuation. However, the CEO who introduced the company to the world 15 years ago has not become synonymous with the brand. And he certainly didn’t end up the richest person in history.
Elon Musk was still the face behind the success of the company
That place belongs to Elon Musk, of course, Tesla’s first investor and the company’s current CEO. Musk was also present at Tesla’s 2006 debut, but took a more reserved stance that day, only arguing for the need to get rid of gasoline cars as quickly as possible.
Tesla’s original CEO, Eberhard, and another executive named Marc Tarpenning, who in 2003 came up with the idea of naming the company’s vehicles after inventor Nikola Tesla, are the company’s original shareholders – the first men to claim ownership of the company. However, none of them have retained enough shares of Tesla to achieve billionaire status, let alone Musk’s current net worth, which Forbes estimates at $271 billion, as of yesterday’s markets close.
It was Musk’s seed money – the result of an investment in PayPal’s early years – that turned Eberhard and Tarpenning’s vision into reality. Ultimately, it also put Musk on the path to taking full control of Tesla, steadily increasing his equity stake in a series of nine rounds of financing ahead of the company’s 2010 IPO, each further diluting Eberhard and Tarpenning’s holdings. Even today, Musk’s stake grows as he continues to get paid in shares worth billions of dollars instead of salaries.
In an interview, Eberhard told Forbes that he retains a “relatively small” stake in the automaker, and refuses to elaborate further. “I sold a lot of my stock a long time ago,”. He now has 61 and lives in a house in the San Juan Islands, Washington state. “People have this idea that I was a zillionaire when I started Tesla. I was not”. If Eberhard had gotten richer from the sale of the Rocket eBook, one of the first portable e-readers on the market that he and Tarpenning created in the late 1990s, Musk’s investments would not have been necessary, he says.
Elon Musk keeps walking in the road of money and success
Interestingly, Elon Musk says he doesn’t care about wealth. He sold his Los Angeles mansions last year to live in a modest prefab home near SpaceX’s headquarters in Boca Chica, Texas. Even so, he continues to accumulate fortunes at a remarkable rate. This is due to an initial equity stake of nearly 20% in the company and a long-term bonus plan announced in 2018 that rewards him with billions of dollars worth of Tesla stock every time he hits the quarterly performance targets, which are based on financial metrics and the market value of the company.