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November 18, 2021

Electric car upstart Tesla gathered reporters at a Santa Monica Airport hangar on a July afternoon in 2006 to unveil its battery-powered roadster, an audacious, $100,000 two-seater for which few automotive experts saw much hope of success. The company’s brash, tech-savvy CEO, Martin Eberhard, declared that Silicon Valley ingenuity would teach Detroit’s auto giants how to make compelling zero-emission cars. Tesla’s first effort, a modified Lotus Elise chassis packed with 7,000 tiny lithium-ion cells, was a high-end concept that would soon be followed by a lower-priced family sedan, the chief executive said. The vision he laid out that day ultimately came to pass, but not with him in charge.

Tesla this month became the first carmaker to hit an astonishing $1 trillion valuation, but the CEO who introduced the company to the press 15 years ago didn’t become synonymous with the brand. And he certainly didn’t wind up as the wealthiest person in history. That’s Elon Musk, of course, Tesla’s earliest investor and the company’s current CEO. Musk was also present at Tesla’s debut in 2006, but he assumed a lower profile that day, mainly arguing for the need to shift cars away from gasoline power as quickly as possible.

Tesla’s original CEO, Eberhard, and another early executive named Marc Tarpenning, who in 2003 dreamed up the idea of naming the company’s vehicles in honor of inventor Nikola Tesla, are Tesla’s original shareholders — the first men to claim ownership of the upstart brand that would go on to shake up the Detroit establishment. But neither of them retained enough Tesla stock to achieve billionaire status, much less Musk’s current net worth that Forbes estimates at $282 billion as of Nov. 10. It was Musk’s seed capital—the result of an early payday investing in payments processor PayPal—that turned Eberhard and Tarpenning’s vision into a reality. Ultimately, it also set Musk on a path to take full control of Tesla by steadily raising his ownership stake in a series of nine funding rounds prior to the company’s 2010 IPO, each of which further diluted the stakes of Eberhard and Tarpenning. Even today Musk’s stake grows as he continues to receive quarterly stock awards, in lieu of salary, worth billions of dollars.

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