What Elon could do was to buy an eBox. While Hanks liked the car, Elon didn’t like the idea to convert the Toyota Scion xB. The basic vehicle cost $20 000, the electric conversion cost $45 000, so you had to pay $65 000 for the final vehicle. “Who wants to take an ugly $20 000 car and buy it for $65 000?” Elon asked. “That’s not a very viable strategy. I wouldn’t want to drive it. My wife certainly wouldn’t want to drive it. I said, ‘Look, I wouldn’t even drive an electric Scion if it was free.’ I mean, it’s OK as a car, but come on.”4,209
Elon told AC Propulsion that if they didn’t want to manufacture an electric vehicle for the mass market, then he would do it on his own. “Do you want to meet Martin, Marc, and Ian?” AC Propulsion asked Elon.199
Martin Eberhard was born in 1960 in California and at age thirteen, he drove his first car. With a degree in computer and electric engineering from the University of Illinois, he had founded several companies.209
In 1996, Eberhard co-founded NuvoMedia together with Marc Tarpenning. He was born in 1964 in California and earned a degree in computer science from the University of California. After graduating, he spent the next five years in the oil-rich nation of Saudi Arabia where he worked at Textron – an American company involved in a wide range of products, including electric golf carts.
It was when he was working in Saudi Arabia that Tarpenning discovered the oil industry’s darker sides. “The amount of treasure that is sent to the Middle East to supply our oil addiction is astonishing,” he said. “And it doesn’t necessarily do good things there and it doesn’t do good things for us, and that got me thinking that oil is not so great.”453
In 2000, Eberhard and Tarpenning sold their company to Gemstar for $187 million.71 Now they wanted to create a new company. “We knew we wanted to solve a real problem,” Tarpenning said. “We just couldn’t do another network widget.” They researched a wide range of major problems, including water scarcity and income inequality. “So we looked at these big problems, and there are a lot of big problems out there, but the one that we took was oil,” Tarpenning said.453
The reason why they thought oil was the major problem is because oil causes several other problems, including global warming, political problems, and economical problems. “If you can reduce your dependency on oil everything gets easier,” Tarpenning said.453
When US refused to sign the Kyoto Protocol on climate change, Eberhard was embarrassed, and he was concerned about how US had to import oil from troublesome countries. This was when primarily US troops for the second time in twelve years invaded Iraq.205 “To me, the only way that I can be successful at something is to work at something I actually care about,” Eberhard said. “This time around, the something meaningful I care about was oil consumption. It was clear to me that we had to do something about our oil consumption, both from a global warming perspective and from a national security perspective.”355
To calm his nerves, he tried to buy an electric car. But he realized he couldn’t find one to buy. “So I was considering some of the electric cars that were on the market,” Eberhard said. “I didn’t particularly like them, but I thought about maybe I would convince myself to get one. And just about when I had talked myself into that, they disappeared from the market.” He realized not a single car company in America tried to design a decent electric car.200
While not petting his Siamese cat, Eberhard cruised around in California. He saw how wealthy people, including actor Clint Eastwood, drove the environmental friendly Toyota Prius only because they cared about the environment. The gasoline price was in 2003 low, so they didn’t drive it to save money.196 “Every time I get into my Prius, I feel like I’m demonstrating my point of view on national security,” the talent agent, Ari Emanuel, said when he replaced his Ferrari with a Prius.346
When the Prius drivers returned home, they also had a Porsche or a similar expensive gasoline car parked in their garage. Eberhard realized a market existed for a sports car with the same performance as a Porsche and at the same time was more environmental friendly than the Prius – a Porschius as he called it.345 The average income of the EV1 drivers was above $200 000 per year. Since they couldn’t drive the EV1 anymore, maybe they would buy a Porschius? Or maybe they needed an electric motorcycle? But the market for such as bike wasn’t as interesting as the market for electric cars.453
The Prius had both a battery and a gasoline engine, but the battery couldn’t charge when the owner parked the car. “Without plug-in capability, a hybrid is just a gasoline powered car with some fancy hardware,” Eberhard said. He nicknamed the Prius dork mobile. Elon had the same ideas. “You could have the entire country driving the Prius and we’d still be addicted to oil,” Elon said. “When you create a hybrid, you’re designing an amphibian – and an amphibian is going to be a worse fish than a fish, and a worse mouse than a mouse or whatever creature you want to pick.”197 Elon nicknamed the Prius gas-guzzling hog.
Eberhard and Tarpenning examined the electric car market, mainly with the help of a Google search and by ordering brochures on eBay. They came to the same conclusions as Elon had when he did a similar market research. Electric power is the future because electricity gives you the highest efficiency and performance compared with other alternatives.345 Hydrogen fuel-cells, natural gas, hybrid technologies, and diesel were all dismissed as competitive alternatives.196 “What surprised me was that electric cars were substantially more efficient than everything else out there,” Eberhard said.205
The tzero did not only convince Elon, it also convinced Eberhard he could design a true electric sports car. He had earlier invested money in AC Propulsion – they had lost several contracts and were about to go bankrupt – and he also drove the tzero as a daily driver during three months. “The company was about to go out of business,” Eberhard said. “When I saw them, they had five employees left and were not paying salaries. I paid their rent and commissioned them to build a car.”223
The drawback with the tzero wasn’t the speed – it was the 60 miles [100 km] range. To increase the range, Eberhard told AC Propulsion to replace the old batteries with thousands of lithium-ion batteries – the same battery as in a laptop or a mobile phone. Eberhard used these batteries at NuvoMedia where he and Tarpenning developed the RocketBook – an early e-book reader similar to the Kindle and the iPad. Before Amazon developed the Kindle, NuvoMedia negotiated with the CEO of Amazon, Jeff Bezos, if Amazon wanted to invest in their company. But Ebehard didn’t agree to Bezos’s demands.411
The RocketBook’s batteries lasted for 20 to 24 hours. When they installed the new batteries, the device became lighter but had the same performance.344 It turned out AC Propulsion already experimented with the same batteries, and the new batteries worked as expected. The tzero’s range increased to 300 miles [480 km] and the acceleration improved to 0–60 mph [0–100 km/h] in 3.6 seconds.196
In the summer of 2003, Eberhard co-founded Tesla Motors together with Tarpenning. When they founded the company, they chose between if they should name the company after the scientists Nikola Tesla or Michael Faraday.350 They agreed on Tesla Motors. Another fan of Tesla is Elon, who even contributed with financial aid to a future Tesla museum. JB Straubel is also a fan of Tesla and one of his favorite biographies is Wizard: The Life and Times of Nikola Tesla by Marc J. Seifer.215