In the early 2000s, Tesla Motors was a small start-up underdog in the automotive industry.
And thanks to Tesla's success, CEO Musk became the second richest person in the world in November, surpassing Bill Gates, according to the Bloomberg Billionaire Index. His net worth increased to $128 billion after Tesla shares surged as news spread that the electric car company will be admitted to the S&P 500 index in December.
Musk recalled on the "Third Row Tesla" podcast in February the experience that led him to invest in Tesla in the first place.
″[The first Tzero model] literally didn't have doors or a roof, or any airbags or an effective cooling system. It was not safe or reliable," Musk said on the podcast. But it intrigued him.
The electric sports car built in 1997 by a small California company called AC Propulsion, was essentially a version of "the prototypical Tesla Roadster," according to Wired. But while AC Propulsion founder Alan Cocconi and then-CEO Tom Gage were "technology visionaries," according to Wired, they didn't have "the entrepreneurial vision to see just how big an idea it could become" or "the means to achieve it."
Musk did. He was inspired and saw an opportunity to bring the electric car to market.
Although Musk didn't want to take on another start-up (he had just founded aerospace company SpaceX), he asked Cocconi and Gage if he could commercialize the Tzero. They agreed, according to Musk, and Gage suggested Musk speak with electric car start-up Tesla Motors and its founders, engineers Martin Eberhard and Marc Tarpenning, who were also looking to commercialize the Tzero.
With money Musk earned as a co-founder of PayPal, which eBay bought for $1.5 billion in 2002, he invested $6.3 million in start-up Tesla Motors in 2004, according to Wired. (The company had five co-founders: Eberhard and Tarpenning, who started the original Tesla Motors in 2003, as well as Ian Wright, JB Straubel and Musk.)
Four years later, Musk became the CEO of Tesla after deciding to invest more of his personal fortune into the company.
"Major credit to AC Propulsion for the Tzero electric sports car 1997-2003 that inspired Tesla Roadster," the electric car company's first release, Musk tweeted in December 2018.
"Without that, Tesla wouldn't exist or would have started much later."
This story has been updated to reflect Elon Musk's current net worth.
- In high school, this is the career Elon Musk thought he would pursue – and why he changed his mind
- How to land a job at Elon Musk's SpaceX, according to the rocket company's software team
- In college, Elon Musk thought these 5 things would change the world