In 2003, Martin Eberhard, a cofounder of Tesla Motors, decided it was time to start wooing investors. To do that, however, he needed an electric car. So he talked to Alan Cocconi and asked if he could borrow the tZero, the revolutionary and blazingly fast electric roadster that Cocconi had built at AC Propulsion.
Eberhard’s idea was to drive the tZero up and down Sand Hill Road in the heart of Silicon Valley and do demonstrations for curious entrepreneurs and VCs. Eberhard was joined by Tom Gage, Cocconi’s partner at AC Propulsion, on many of the visits. Like Tesla, AC Propulsion was also seeking investors, but to build a considerably more utilitarian EV.
In December 2003, Eberhard also proposed a demo at Buck’s of Woodside, a popular restaurant frequented by tech entrepreneurs. At 5 o’clock on any evening, Buck’s probably had more VCs per square foot than any building in the country. Eberhard’s plan was to “show off what a real electric sports car can do,” he wrote in an email to Buck’s owner, Jamis MacNiven. MacNiven happily obliged.
In some ways, the tZero was a hit. When a VC would ride shotgun in the car with Eberhard at the wheel, Eberhard would implore them to touch the dashboard. As they reached forward, he’d punch the accelerator. As the car accelerated and the g forces piled up, the VC was literally unable to touch the dashboard. That was how powerful the tZero’s acceleration was, Eberhard would say.
Many of the VCs were astounded. Some even questioned whether the car was really electric. Many owned Ferraris or Lamborghinis. They knew sports cars—but this? They could never have imagined it was possible to do this with an electric drivetrain.
On December 13, 2003, Martin Eberhard brought AC Propulsion’s tZero electric roadster [yellow] to Buck’s of Woodside, a popular hangout for entrepreneurs and venture capitalists. Next to the tZero is a Scion xB, which AC Propulsion’s principals thought they could turn into a mass-market electric vehicle.Martin Eberhard
Still, the demo at Buck’s garnered little investor interest—with one exception. Google cofounders Sergey Brin and Larry Page were both at Buck’s that day, and they told Gage they knew an individual whose funds were liquid, as he’d recently sold his stake in a startup. What’s more, this individual liked fast cars.
The man’s name was Elon Musk.
In 2004, it wasn’t apparent to anyone that Elon Musk had a future in the auto industry. He was notable for cofounding PayPal, which he then sold to eBay in 2002 for a whopping US $1.5 billion. He had already launched Space Exploration Technologies Corp., or SpaceX, with the stated goal of paving the way to a sustainable colony on Mars. Musk did love fast cars. He owned a million-dollar silver McLaren F1, one of only 64 road-going F1s in the world, as well as a 400-horsepower BMW M5 sports car and a 1967 XK-E Series 1 Jaguar roadster. But he’d never expressed an interest in building cars or starting an auto company, at least not publicly.
Elon Musk was photographed in 2008 at Tesla’s headquarters, then in San Carlos, Calif., around the time when Tesla’s Roadster was being delivered to its first customers.Patrick Tehan/MediaNews Group/Bay Area News/Getty Images
Still, Musk’s affinity for fast cars made it almost impossible for him to ignore an email from Gage on 21 January 2004. “Sergey Brin and JB Straubel both suggested you might be interested in driving our tZero electric sports car,” Gage wrote. (Straubel was the young Stanford engineering graduate who would later serve as Tesla’s chief technology officer.) “The tZero goes quite well,” the email continued. “We ran it against a Viper last Monday and it won four of five sprints on a 1/8th of a mile track. I lost one because I was carrying a 300-pound cameraman. Do you have time for me to bring it by?”
Musk quickly replied. “Sure, I would really enjoy seeing it. Don’t think it could beat my McLaren (yet) though I’m in town Feb 2nd through 4th.” “Hmm, a McLaren, boy that would be a feather in my cap,” Gage wrote back. “I can have it there on Feb. 4.”
Two of the principals behind AC Propulsion were businessman Tom Gage, left, and engineering genius Alan Cocconi.Left: Tom Gage; Right: Alec Brooks
The emails marked the beginning of Musk’s involvement in electric cars and in the auto industry. Gage drove the car to SpaceX headquarters, a warehouse in El Segundo, Calif., about 30 kilometers southwest of Los Angeles. In Musk’s cubicle in the “office” portion of the warehouse, Gage made his pitch.
There was a void in the market, he said. GM had abandoned the EV1. Toyota, Honda, Ford, and Chrysler were shutting down their electric car programs. California’s zero-emission vehicle (ZEV) rules, which mandated the sale of increasing numbers of vehicles with no tailpipe emissions, had been plundered. But electric vehicle technology, he said, was getting a bad rap. Here was the tZero, an electric car that could take off like a jet. The tZero proved that the technology was readily available. He and Cocconi wanted to use that technology to make an electric car that was useful and practical: the eBox, an electrified Toyota Scion.
After building the tZero roadster, AC Propulsion’s principals pinned their hopes on an electrified version of the Toyota Scion they called the “eBox.” It did not appeal to Elon Musk.Jeff Chiu/AP
For Musk, Gage’s introduction of the eBox was unexpected. He was meeting with Gage because he was interested in the tZero. It was the car’s performance that appealed to Musk.
He wasn’t interested in the eBox. He then drove the tZero and offered to buy it.
The lithium-ion version of the tZero electric roadster could get 515 kilometers on a charge and go from zero to 97 km/hr (60 miles per hour) in 3.6 seconds. Only three tZeros were built and only two survive. Scott Sorbe
Gage told him it wasn’t for sale. Undeterred, Musk offered a quarter million dollars if AC Propulsion would squeeze its lithium-ion battery pack into his Porsche. Gage declined again. AC Propulsion needed money to electrify the Toyota Scion, Gage said.
Musk shook his head. The idea seemed incredible to him. “Who wants to take an ugly $20,000 car and buy it for $65,000?” he asked incredulously, as he later recalled during an interview with Vanity Fair magazine. “I wouldn’t want to drive it. My wife certainly wouldn’t want to drive it.”
Many years later, Musk would tell his biographer Walter Isaacson, “Nobody is going to pay anything near that for something that looks like crap.” Musk believed that the way to start a car company was to build high-priced cars first and then let the technology trickle down to the mainstream. It was a classic Silicon Valley approach.
Alan Cocconi, the engineering whiz behind AC Propulsion, stands next to the company’s legendary tZero electric roadster in a picture taken in the early 2000s. The small yellow wheeled pod on the other side of the car is a trailer with a small gasoline engine that, when connected to the tZero, turned it into a hybrid gas-electric vehicle.Martin Eberhard
In Musk’s mind, it was all very obvious. He liked fast cars. He liked the tZero and believed it “could change the world.” He couldn’t even imagine why Gage was sitting here trying to sell him on the idea of the eBox. “Gage and Cocconi were sort of madcap inventors,” he told Isaacson. “Common sense was not their strong suit.”
Gage concluded that he wasn’t going to convince Musk to invest in AC Propulsion. “Well, if you want to do a sports car, then you should talk to Martin Eberhard,” Gage said. A few weeks later, Gage sent an email to Eberhard introducing him to Musk. “Elon Musk heads up SpaceX, is a car enthusiast,” Gage wrote. “He would be interested in hearing about your activities at Tesla Motors.”
As it happens, Eberhard and Marc Tarpenning, Eberhard’s partner and cofounder at Tesla, had considered contacting Musk even before Gage’s email arrived. They’d known of Musk and appreciated the way he thought. A few years earlier