Tesla, Inc. is an American multinational automotive and clean energy company headquartered in Austin, Texas. It designs, manufactures, and sells battery electric vehicles (BEVs), stationary battery energy storage devices from home to grid-scale, solar panels and solar shingles, and related products and services. The company was incorporated in July 2003 by Martin Eberhard and Marc Tarpenning as Tesla Motors, and its name is a tribute to the inventor and electrical engineer Nikola Tesla. In February 2004, Elon Musk led Tesla's first funding round and became the company's chairman, subsequently claiming to be a co-founder; in 2008, he was named chief executive officer. Tesla is one of the world's most valuable companies in terms of market capitalization, and since July 2020 it has been the world's most valuable automaker. The company is also known for its development of advanced driver-assistance systems under the Tesla Autopilot brand, as well as its work on artificial intelligence for full self-driving (FSD) and the Optimus humanoid robot, which are distinct from the efforts of xAI, a separate company founded by Musk.
Founding and Early History
The company was incorporated as Tesla Motors, Inc., on July 1, 2003, by Martin Eberhard and Marc Tarpenning, who served as chief executive officer and chief financial officer, respectively. Eberhard said that he wanted to build "a car manufacturer that is also a technology company," with its core technologies as "the battery, the computer software, and the proprietary motor." Ian Wright joined Eberhard and Tarpenning a few months later. In February 2004, the company raised US$7.5 million (equivalent to $12.8 million in 2025) in series A funding, including $6.5 million (equivalent to $11.1 million in 2025) from Elon Musk, who had received $176 million from the sale of his interest in PayPal two years earlier. Musk became the chairman of the board of directors and the largest shareholder of Tesla. J. B. Straubel joined Tesla in May 2004 as chief technical officer. A lawsuit settlement agreed to by Eberhard and Tesla in September 2009 allows all five - Eberhard, Tarpenning, Wright, Musk, and Straubel - to call themselves co-founders.
Roadster and Early Production
Elon Musk took an active role within the company, but was not deeply involved in day-to-day business operations. The company's strategy was to start with a premium sports car aimed at early adopters and then move into more mainstream vehicles, including sedans and affordable compacts. In February 2005, Musk led Tesla's Series B venture capital funding round of $13 million, which added Valor Equity Partners to the funding team. Musk co-led the third, $40 million round in May 2006 which saw investment from prominent entrepreneurs including Google co-founders Sergey Brin and Larry Page, and former eBay president Jeff Skoll. A fourth round worth $45 million in May 2007 brought the total private financing investment to over $105 million.
In August 2007, Eberhard was asked by the board, led by Musk, to step down as CEO. Eberhard then took the title of "President of Technology" before ultimately leaving the company in January 2008. Co-founder Marc Tarpenning, who served as the Vice President of Electrical Engineering of the company, also left the company in January 2008. In August 2007, Michael Marks was brought in as interim CEO, and in December 2007, Ze'ev Drori became CEO and president. Musk succeeded Drori as CEO in October 2008. In June 2009, Eberhard filed a lawsuit against Musk for allegedly forcing him out. The case was dismissed in August 2009. Tesla began production of the Roadster in 2008 inside the service bays of a former Chevrolet dealership in Menlo Park. By January 2009, Tesla had raised $187 million and delivered 147 cars. Musk had contributed $70 million of his money to the company.
Growth and Model S, Autopilot, and Model X
In January 2010, Tesla received a $465 million government loan from the Department of Energy's Loan Program Office (LPO), for U.S.-made advanced clean energy technology commercialization and manufacturing. This strategic funding was critical to the creation of the Model S, and was repaid in full. In May 2010, Tesla purchased the NUMMI plant in Fremont, California, from Toyota for $42 million. On June 29, 2010, the company went public via an initial public offering (IPO), the first American car company to do so since Ford Motor Company in 1956. The company issued 13.3 million shares of common stock at a price of $17 per share at its opening on the NASDAQ, raising $226 million.
In October 2010, Tesla opened the Tesla Factory. In January 2012, Tesla ceased production of the Roadster, and in June 2012, the company began producing its second car, the Model S luxury sedan. The Model S won several automotive awards during 2012 and 2013, including the 2013 Motor Trend Car of the Year, and became the first electric car to top the monthly sales ranking of a country, when it topped the Norwegian new car sales list in September 2013. The Model S was also the best-selling plug-in electric car worldwide for the years 2015 and 2016. On July 15, 2013, Tesla became a NASDAQ-100 company.
In 2014, Tesla announced Tesla Autopilot, a driver-assistance system. In September of that year, all Tesla cars started shipping with sensors and software to support the feature, with what would later be called "hardware version 1." Tesla entered the energy storage market, unveiling its Tesla Powerwall (home) and Tesla Powerpack (business) battery packs in April 2015. The company received orders valued at $800 million within a week of the unveiling. In September 2015, Tesla began shipping its third vehicle, the luxury SUV Tesla Model X which had 25,000 pre-orders at the time.
SolarCity and Model 3
In November 2016, Tesla diversified into solar energy by acquiring SolarCity, a solar panel and solar shingle company, in an all-stock deal valued at approximately $2.6 billion. The acquisition was intended to create a vertically integrated clean energy company. In July 2017, Tesla began production of the Model 3, a more affordable sedan aimed at the mass market. The Model 3 was critical to Tesla's growth strategy, and by 2018 it became the best-selling plug-in electric car worldwide. The company also faced significant production challenges, often referred to as "production hell," as it struggled to ramp up manufacturing to meet high demand.
Autopilot and Full Self-Driving Development
Tesla Autopilot is a driver-assistance system that provides features such as lane centering, adaptive cruise control, and automated lane changes. The system uses a combination of cameras, radar (in earlier versions), and ultrasonic sensors, along with a proprietary Neural network and Deep learning software stack. Tesla has consistently stated that Autopilot is not a fully autonomous system and requires active driver supervision. In 2016, Tesla began developing "Hardware 2" and later "Hardware 3," which included a custom Artificial intelligence chip designed for processing visual data in real time. The company's Full Self-Driving (FSD) beta program, launched in 2020, allows selected drivers to test more advanced features, such as navigating on city streets and automatic stopping at traffic lights and stop signs. Tesla's approach to autonomy relies on a vision-based system, eschewing lidar, which is used by competitors like Waymo and Cruise. The development of FSD has been controversial, with regulators and safety advocates raising concerns about the system's limitations and the potential for misuse. Tesla has also faced lawsuits and government scrutiny over the marketing of its Autopilot and FSD features, with critics arguing that the names overstate the system's capabilities.
Optimus Robot and AI Initiatives
In August 2021, Tesla announced the Tesla Bot, later named Optimus, a humanoid robot designed to perform repetitive or dangerous tasks. The robot is intended to leverage the same Artificial intelligence and Machine learning technologies developed for Autopilot and FSD, including computer vision and Neural network based decision making. Tesla has demonstrated several prototypes of Optimus, with the goal of eventually deploying the robot in its own factories and then selling it commercially. The development of Optimus is separate from xAI, a company founded by Elon Musk in 2023 to focus on understanding the true nature of the universe and developing advanced Large language models. While Tesla's AI work is focused on physical applications like driving and robotics, xAI's work is centered on general-purpose AI and conversational systems. Tesla's AI efforts also include the development of a supercomputer called Dojo, designed to train its neural networks more efficiently. The company has invested heavily in Artificial intelligence infrastructure, including custom silicon and Deep learning frameworks.
Market Position and Financial Performance
Tesla is one of the world's most valuable companies in terms of market capitalization. Starting in July 2020, it has been the world's most valuable automaker. From October 2021 to March 2022, Tesla was a US$1 trillion company, the sixth US company to reach that valuation. In 2023, the company was ranked 69th in the Forbes Global 2000. In 2024, the company led the battery electric vehicle market, with 17.6% share. Tesla exceeded $1 trillion in market capitalization again between November 2024 and February 2025, and from May 2025 to July 2026. In November 2025, Tesla approved a pay package worth $1 trillion for Musk, which he is to receive over 10 years if he meets specific goals. By the end of 2025, the company lost its status as world's leading manufacturer of electric vehicles. The company's financial performance has been volatile, with periods of rapid growth and profitability followed by slowdowns and margin pressures due to increased competition and price cuts.
Controversies and Criticism
Tesla has been the subject of lawsuits, boycotts, government scrutiny, and journalistic criticism, stemming from allegations of multiple cases of whistleblower retaliation, worker rights violations such as sexual harassment and anti-union activities, safety defects leading to dozens of recalls, the lack of a public relations department, and controversial statements from Musk, including overpromising on the company's driving assist technology and product release timelines. The company has faced numerous investigations by the National Highway Traffic Safety Administration (NHTSA) and other regulatory bodies regarding the safety of its Autopilot system. Tesla's approach to public relations, which often relies on Musk's social media presence, has been criticized for creating confusion and misinformation. Despite these challenges, Tesla remains a major player in the automotive and clean energy sectors, with a strong brand and a loyal customer base.