Among “The Magnificent Seven” stocks that have been buoying the Dow Jones Industrial Average to new heights, none of those companies’ founders eclipses their company’s product or service more than Tesla’s (NASDAQ: TSLA) Elon Musk.
While Musk’s involvements with satellite and aerospace designer SpaceX, cryptocurrency Dogecoin, and social media company X (formerly Twitter) often overshadow Tesla’s Electric Vehicle business in news headlines, his personal controversies are the subject for another article.
Tesla stock is the biggest source of Musk’s net worth. Savvy investors who took the plunge and bought Tesla stock back in 2014 at $13.20 have done well – up about 11,900%, based on Tesla’s price at the time of this writing. But why has Tesla done so well? Let’s take a look at some history:
Tesla’s Messy Genesis
Source: Tesla Inc.
Tesla actually was started in 2003 by tech engineers Martin Eberhard and Marc Tarpenning, who had the dream of building a commercially viable, computer powered electric car. Elon Musk, freshly wealthy with $100 million from selling his stake in PayPal Holdings (NASDAQ: PYPL), invested in Tesla’s A-round the following year. Musk soon became Tesla’s largest shareholder and Chairman of the Board.
Musk would lead Tesla’s subsequent funding rounds. After a number of management squabbles, Eberhard and Tarpenning would eventually leave the company, with Musk becoming CEO in 2008 and commencing production of the Tesla Roadster. By 2009, Tesla had raised $187 million, $70 million of it coming personally from Musk. Tesla made delivery of its first 147 cars early that same year. In 2010, Tesla launched its IPO.
New Cars, New Technologies
Source: Justin Sullivan / Getty Images News via Getty Images
Tesla would go upscale next, introducing its Model S sedan and Model X SUV over the next five years. The Model S became the best selling plug-in electric car in both 2015 and 2016. The mass market Model 3 sedan would follow, and the Model 3 would become the best selling electric car from 2018 to 2021. The Model Y mass market SUV version of the Model 3 would make its debut in 2019, with deliveries commencing in 2020. Tesla also unveiled its first Cybertruck in 2019.
Concurrently with new EV models, Tesla also developed ancillary products. Entering the energy storage market, Tesla released its rechargeable Powerwall lithium-ion home storage battery and Powerpack, which was designed for businesses and utility projects. It acquired SolarCity for its battery technology to become a key part of subsidiary Tesla Energy.
Tesla’s Stock Trajectory
At the time of this writing, Tesla stock is at $171.05. A $10,000 investment ten years ago, when the stock traded at $13.20, would have bought 757 shares. At the current price, those shares would be worth $125,910, a nearly 13-fold ROI. At its peak in Nov, 2001, the $10,000 investment would have been over $300,000.
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