Erik Nordeus - The Engineer

Rebuilding the car in six weeks wouldn’t be an easy task. When they became tired, they slept underneath a stair. Despite the low odds, the Smart was ready at exactly the right moment. Straubel sat down in the driver’s seat, floored the pedal, and the Smart rocketed out of the garage. It used a modified version of the Roadster’s engine, so the front wheels of the much smaller Smart lifted from the ground and the rear tires left black marks on the workshop’s floor. 210

The Daimler executives arrived to Tesla. After a PowerPoint presentation, the executives from Daimler were not convinced. “Everything works great on PowerPoint. You can make anything work on PowerPoint,” Elon said. “If you have a demonstration model, even in primitive form, that’s much more effective in convincing people.” 63

Daimler didn’t yet know that Tesla had modified a Smart, so Tesla showed them what they had done. “We’ve actually got something to show you. It’s electric. We put in a Tesla battery and motor,” Elon told them. After a test drive, Daimler was ready to explore a partnership. In 2009, Tesla got a $40 million contract to manufacture 1000 battery packs for Smart cars and Daimler bought 10 percent of Tesla for $50 million. 198“Tesla enables us to skip a generation and get into electric as fast as possible,” Daimler said. 59

But Daimler wasn’t the only car company that was interested in Tesla’s technology. “That was Akio Toyoda’s office. He called and said he’d like to consider being friends,” Elon said after he got the phone call from the CEO of Toyota. 225They set up a meeting with Toyoda who wanted to discuss business opportunities. To show Toyota they were serious, they learned everything about the fine points of Japanese business etiquette, including how to bow the Japanese way. 210

The breakfast meeting took place in Elon’s private home in Bel Air. Only minutes before the meeting began, the Tesla team saw how Elon walked out of his house. To mark the occasion, he wore a Halloween joke tie decorated with pumpkins, skeletons, and fake blood. Everyone thought Elon had finally gone crazy and now he would ruin everything. Then, suddenly, Elon looked up with a large smile. “I got you guys,” he shouted. Elon wanted to reduce the tension everyone felt before they would meet the president of the world’s largest car manufacturer. 210

Toyoda arrived with a convoy of Toyota Sienna minivans and a Lexus limousine. Bodyguards stepped out of the vehicles, followed by Toyota executives and Toyoda himself. Elon could see how Toyoda looked at a Roadster, so he asked if Toyoda wanted to drive it. Toyoda was a certified test driver and had competed in the 24-hour Nürburgring endurance race in Germany. With ease, Toyoda drove the Roadster around the hilly area around Bel Air. Elon tried to focus on the conversation with Toyoda who said he wanted his company to become more entrepreneurial. Toyoda admired how Elon had managed to develop the Roadster and he thought it seemed like a good car. 210

When they came back, they had a short meeting before Toyoda decided to cancel his schedule for the rest of the morning. He wanted more of the Roadster. Elon decided to show him the SpaceX factory, so they took a Roadster and drove there. At the factory, they watched rocket launch videos while eating frozen yogurt. 210

Four weeks later, Toyota decided to invest $50 million in Tesla. They wanted Tesla to develop the second generation RAV4 EV – the former competitor to the EV1 and loved by the actor Tom Hanks. “It’s a great honor for Tesla to work with a company like Toyota, which is really one of the leaders in the world and a company I personally have long admired,” Elon told the audience of the press conference where the collaboration was announced. The next on the stage was Toyoda himself. “Mr. Musk kindly gave me the opportunity to drive one of Tesla’s electric vehicle,” he said. “Not only was I impressed by Tesla’s technology, but I also felt their energy seeing that they made their vehicle in an extremely short time. I felt the wind – the wind of the future. While driving I talked with Mr. Musk and again I was moved by his dedication to Toyota’s approach to making things.” 448

It may first sound like it’s the wrong strategy to sell Tesla’s technology to other car manufactures when Tesla could sell the cars themselves. But you can’t compare Tesla’s existing cars with the RAV4 EV or the Smart. 225Tesla’s strategy is similar to the strategy used by Apple. What Apple did was to make sure their software in the competing products didn’t compete with Apple’s products. Apple wanted others to use their technology to see how great it is. The media library and store iTunes used to be exclusively for Apple computers, but Apple decided to let Windows users install iTunes, and the rest is history. How many people use iTunes today? 238

“Over time my focus has shifted from engineering, which is kind of my intrinsic forte, to supply chain, production and now service to make sure that people have a really great experience,” Elon said. “It’s not my natural predilection, but it is the thing that needs to be done.” 194To service Tesla’s customers and to find new customers, Tesla needed stores similar to the Apple Stores. “The reason I mentioned Apple as an influence is that their stores are beautiful and stylish, but also simple, fun, and friendly at the same time,” Elon said. “Those qualities are what we want to see in our Tesla Stores. We will put as much energy into making our stores look good as we do with our cars.” 245

Because the Tesla Stores and the Apple Stores would be similar to each other, Elon contacted George Blankenship. He had worked for the global clothing store GAP before he invented Apple’s retail strategy. 51Blankenship retired from Apple in 2006 and now he worked as a consultant. He began receiving e-mails with the topic “Elon Musk would like to meet you” or “Elon Musk would like to talk to you.” As he had never before heard of this Elon Musk, he didn’t bother to read the e-mails. “When you’re in real estate you get e-mails like that ten times a day,” Blankenship said. “People want to talk to you about every little shopping center they have everywhere in the world. I kept deleting the e-mails.” 238

Several years earlier, Blankenship was told that Steve Jobs had called him. But he thought it was a joke and almost hung up the phone before someone stopped him. Maybe he remembered the first call from Jobs when Blankenship one day decided to read the e-mails from Tesla. “Elon Musk would like to speak to you about the things you did at Apple. Please give me [Elon’s secretary] a call,” the e-mail said. He called Elon’s secretary who put him through to Elon. “Can I see you tomorrow?” Elon asked. “I have to meet at Cape Canaveral tomorrow with Obama at noon and we’re doing a presentation. The airport is going to be closed until five. I could get to you for six o’clock tomorrow.” Blankenship replied that he could. When they met, Elon persuaded Blankenship to meet some people and test drive the car. After 60 seconds behind the wheel, he knew he had to join Tesla. In 2010, Tesla hired Blankenship as a manager of the new Tesla Stores. 238

People are still uncertain about what an electric car is, so the goal of these stores is to change people’s perception. If someone sees an electric car, they should see a car – not a strange result of a science experiment. When gasoline cars were new, they were considered toys for rich people. The famous banker JP Morgan refused to invest in Ford because he thought exactly that. “When I joined Apple there was one thing that most people knew about Apple: They didn’t want one,” Blankenship said. “It was for a few crazy people and some creative people.” 238