An undercover Google analyst infiltrated a notorious supply-chain hacking gang

<p>Before two of its alleged members were arrested and charged in Australia last month, the hacker group known as TeamPCP <a href="https://www.wired.com/story/teampcp-software-supply-chain-attack-spree-github/">carried out a hacking spree</a> unlike any other in history. It tainted hundreds of open-source programs with its malware, stole developer accounts to perpetuate that software supply-chain hacking, and even released a <a href="https://www.wired.com/story/a-dangerous-worm-is-eating-its-way-through-software-packages/"><em>Dune</em>-themed self-spreading worm</a> to automate the process, ultimately breaching more than a thousand companies.</p> <p>Now Google’s threat intelligence group has revealed that during a key moment of TeamPCP’s rampage, the company’s own undercover researcher had infiltrated the group—allowing Google to monitor the hacking spree from the inside, warn breach targets, and even help disrupt the group’s attempts to exploit those victims.</p> <p>In a talk at security firm SentinelOne's LABScon research conference today, Google Threat Intelligence Group researcher Austin Larsen will present details on the company’s investigation—and infiltration—of TeamPCP amidst the group’s unprecedented, chaotic supply-chain hacking campaign. According to Larsen, Google eventually followed a trail of operational security mistakes allegedly made by one of the two Australians now accused of being leading members of the hacker group and passed on key identifying details to law enforcement. The company also received intelligence from ShinyHunters, another infamous cybercriminal group that TeamPCP partnered with, but which later turned on the supply-chain hackers. And perhaps most surprisingly, Larsen says that Google’s security subsidiary Mandiant had an undercover analyst—not himself—within the group’s inner circle from almost the beginning of TeamPCP’s time in the spotlight.</p><p><a href="https://arstechnica.com/security/2026/09/an-undercover-google-analyst-infiltrated-a-notorious-supply-chain-hacking-gang/">Read full article</a></p> <p><a href="https://arstechnica.com/security/2026/09/an-undercover-google-analyst-infiltrated-a-notorious-supply-chain-hacking-gang/#comments">Comments</a></p> Reference : https://ift.tt/Skn4p15

Turning Tech Talent Into Leadership Legacy

<img src="https://spectrum.ieee.org/media-library/a-team-of-seven-people-having-a-work-meeting-in-an-open-concept-office-space.jpg?id=67787397&width=1245&height=700&coordinates=0%2C156%2C0%2C157"/><br/><br/><p>Transitioning from years of working in a senior technical or executive role to a leadership position is one of the most challenging phases of a STEM career. It requires moving away from making decisions on your own to mentoring others, making strategic decisions for the organization, and collaborating with coworkers from different generations.</p><p>The shift in mindset is known as “legacy leadership,” a philosophy whereby success is no longer measured by personal achievements but by how effectively a senior leader empowers others.</p><p>To help seasoned professionals and senior experts navigate the transition, the inaugural <a href="https://spectrum.ieee.org/stem-leaders-ieee-ilc" target="_self">IEEE International Leadership Conference</a> (ILC) will provide attendees practical advice on cultivating collaborations and guiding emerging talent.</p><p>“Early in our STEM careers, we measure success by what we have achieved,” says <a href="https://www.linkedin.com/in/jranaweera/" rel="noopener noreferrer" target="_blank">Jeewika Ranaweera</a>, cochair of the IEEE ILC program committee. “Later, we should measure success by what we enable, how many people we mentor, how much knowledge we transfer, and how many doors we open for the next generation.”</p><p>The ILC is scheduled for 3 and 4 October in Budapest. <a href="https://ieeeilc.org/registration/" rel="noopener noreferrer" target="_blank">Registration is open</a>.</p><h2>Letting go of the “expert” identity</h2><p>For decades, seasoned technologists have been valued primarily for their technical expertise. Shifting from that identity can feel uncomfortable, but legacy leadership requires measuring success by different standards. They include a leader’s influence on the staff, the ability to uphold the company’s mission, and empowering others to lead and succeed.</p><p>The transition requires leaders to find purpose outside their corporate titles, shifting their focus to the long-term sustainability of their teams, their organization, and the broader technical community.</p><p>“A professional legacy is not measured only by what we have achieved but also by sharing our knowledge, experience, and opportunities with others,” says <a href="https://www.linkedin.com/in/ssjamuar" rel="noopener noreferrer" target="_blank">Sudhanshu S. Jamuar</a>, another program committee cochair. “The real transition from expert to a legacy builder happens when we stop asking, ‘What more can I accomplish myself?’ and start asking, ‘How many others can I enable to accomplish more?’”</p><p><a href="https://www.linkedin.com/in/neeli-rashmi-prasad-phd/" rel="noopener noreferrer" target="_blank">Neeli Rashmi Prasad</a>, IEEE ILC treasurer and sponsorship cochair, adds that the transition transforms a lifetime of technical work into a platform for future innovation.</p><p>“The true value of experience is not in how much knowledge we accumulate but in how intentionally we transfer it,” Prasad says. “When we partner with, mentor, and create space for others to lead, our expertise becomes a foundation for progress far beyond our own careers.”</p><h2>Moving beyond advice-giving</h2><p>True <a data-linked-post="2677133213" href="https://spectrum.ieee.org/mentorship-is-an-underrated-leadership-skill" target="_blank">knowledge transfer</a> requires coaching rather than advising, and mastering the art of active listening. To build deep trust with early-career colleagues and ensure a seamless transfer of leadership to the next generation, senior leaders must avoid offering unsolicited or outdated anecdotes. Effective mentorship is a collaborative loop in which senior experts contribute hard-won industry wisdom while remaining curious and learning from the fresh, cutting-edge perspectives of talented coworkers.</p><p>“Knowledge transfer is most powerful when it is a two-way bridge: experience flows from one generation to the next, while new ideas and perspectives flow back,” says Sudeendra<strong> </strong>Koushik, president of the IEEE Technology and Engineering Management Society and an ILC keynote speaker. “This approach transforms mentorship from simply passing on information into one where the next generation can question, experiment, innovate, and ultimately surpass what came before them.”</p><p>Seasoned professionals should encourage independent, disruptive thinkers rather than carbon copies of themselves, Prasad says.</p><p>“Legacy leadership is about building continuity,” she says. “We should not simply prepare the next generation to follow the paths we created; we should give them the confidence, knowledge, and networks to challenge those paths, create new ones, and take technology further than we imagined.”</p><h2>Designing your next chapter</h2><p>Leadership does not need to stop when one’s job ends; it can evolve. Seasoned, retired professionals can continue contributing meaningful service through pathways that align with their personal passions. They include:</p><ul><li><strong>Advisory boards:</strong> steering corporate, technical, or community organizations.</li><li><strong>Civic engagement:</strong> applying engineering methodologies to solve community challenges.</li><li><strong>Volunteerism:</strong> mentoring the next generation of grassroots innovators through professional networks including IEEE.</li></ul><p>Those pathways offer experienced professionals an opportunity to redefine success, not in terms of position, authority, or personal achievement but in terms of sustained impact.</p><p>“Retirement from a job should never mean retirement from purpose,” Koushik says. “Our experience becomes even more valuable when we use it in service of the profession, society, and the generation that follows.”</p><p>At the same time, the collaborative continuum relies on a proactive younger generation. Emerging leaders need to take responsibility for building their professional connections, Prasad says, advising: “Be bold, stay curious, and build your network early!”</p><h2>A space for continuity</h2><p>The conference is designed to combine a drive to cultivate emerging innovators with a deep reservoir of industry stewardship and strategic perspective. Rather than a single classroom session, the conference will feature a dedicated career-readiness and mentorship track where attendees can explore practical frameworks for building strategic professional networks, connecting with peer advocates, and establishing reciprocal knowledge-sharing opportunities across generations.</p><p>By participating, seasoned professionals can ensure their decades of expertise continue to yield dividends for generations to come.</p><p>“Our professional legacy is not the technology we build, the titles we earn, or the awards we receive,” Ranaweera says. “It is the knowledge we share, the lives we influence, and the future we help others create.”</p><p>You can view the agenda, read speaker biographies, and secure your seat at the ILC <a href="https://ieeeilc.org/" rel="noopener noreferrer" target="_blank">online</a>.</p> Reference: https://ift.tt/9r6gvAJ

Single-Phase Direct Liquid Cooling Is Proven for the Next Decade of Ultra-Dense Compute

<img src="https://spectrum.ieee.org/media-library/coolit-logo-with-text-an-ecolab-company-on-transparent-checkerboard-background.png?id=67781549&width=980"/><br/><br/><p>Learn how single-phase direct liquid cooling manages the rising heat of AI and high-performance computing, and how it compares with two-phase and immersion approaches.</p><p><span><a href="https://content.knowledgehub.wiley.com/single-phase-direct-liquid-cooling-is-proven-for-the-next-decade-of-ultra-dense-compute/" target="_blank">Download this free whitepaper now!</a></span></p> Reference: https://ift.tt/wE3xVjQ

LLMs respond differently to harmful prompts when AI watermarking is used

<p>In response to a new European Union law, AI platforms are implementing new schemes for watermarking the content they generate. Anthropic recently <a href="https://www.anthropic.com/news/claude-text-watermark">disclosed</a> its future Claude models will use <a href="https://www.nature.com/articles/s41586-024-08025-4">SynthID-Text</a>, an approach Google created and released as open source. It uses a secret key that subtly changes the process a model uses for choosing the next word in a sentence. Whereas a top next word choice might be “cloudy,” the key might change it to “overcast.” Anyone who knows the key can determine if it was generated by the platform using it.</p> <p>New <a href="https://www.lasso.security/blog/the-provenance-tax-understanding-the-impact-of-llm-watermarking-on-ai-agent-behavior">research</a> shows that SynthID-Text can change not just word selection but also the tools a model invokes and the chances it will adhere to or disregard safety guardrails it has been trained to follow. The threat can become greater in the face of an adversarial prompt, in which an attacker attempts to cause a model to carry out a harmful action, such as revealing a password or other sensitive information. Instructions that normally wouldn’t be followed will, in some cases, be performed once the watermarking is deployed. The finding underscores the need for developers to thoroughly test how their LLMs and agents behave when watermarking is in place.</p> <h2>Changing safety behavior</h2> <p>“As compared to the same models without watermarking, it is definitely going to change their behavior, especially when we place it under adversarial conditions, or we make these models call tools when they’re powering an agent,” Andrea Siposova, an AI security researcher at Lasso Security, told Ars. “Watermarking is made to not be perceptible to a reader, but we know that when we are changing anything about what the model is generating, it is going to cause some tradeoffs, it’s going to show up somewhere.”</p><p><a href="https://arstechnica.com/security/2026/09/ai-text-watermarking-can-make-models-more-vulnerable-to-adversarial-prompts/">Read full article</a></p> <p><a href="https://arstechnica.com/security/2026/09/ai-text-watermarking-can-make-models-more-vulnerable-to-adversarial-prompts/#comments">Comments</a></p> Reference : https://ift.tt/L8OUmIH

Nonprofit that tracks meteors taken down by "critical blow" from a cyberattack

<p>The International Meteor Organization, the nonprofit that coordinates and publishes amateur and professional observations of meteor phenomena, said its infrastructure has suffered a “critical blow” from a cyberattack.</p> <p>“We recently suffered a cyberattack that dealt a critical blow to aging infrastructure, taking much of our site offline," a static page on its <a href="https://imo.net/">website</a> on Wednesday said. “We expect several weeks of partial downtime as we transition to new infrastructure and services.”</p> <h2>“I am very sad to see the site down”</h2> <p>In the meantime, the IMO said it’s prioritizing the reporting of fireball observations, which can be reported <a href="https://fireball.imo.net/members/imo/report_intro">here</a>. The organization is also providing some information on its Facebook page.</p><p><a href="https://arstechnica.com/security/2026/09/nonprofit-that-tracks-meteors-taken-down-by-critical-blow-from-a-cyberattack/">Read full article</a></p> <p><a href="https://arstechnica.com/security/2026/09/nonprofit-that-tracks-meteors-taken-down-by-critical-blow-from-a-cyberattack/#comments">Comments</a></p> Reference : https://ift.tt/L0XEvMf

Rethinking Robot Safety in the Age of AI

<img src="https://spectrum.ieee.org/media-library/humanoid-robots-and-people-walking-through-a-modern-city-street-with-glass-buildings.jpg?id=67745861&width=1245&height=700&coordinates=0%2C0%2C0%2C0"/><br/><br/><p><em>This article is brought to you by <a href="https://vicone.com?utm_source=ieee-spectrum&utm_medium=sponsored-content&utm_campaign=2026-09" target="_blank">VicOne</a>.</em></p><p>Robot safety has traditionally asked: Can a machine remain safe when something goes wrong? Physical AI raises a harder question: Can a machine remain safe when an attacker changes what it sees, decides, or does even when nothing appears to have failed?</p><p>As AI and robotics continue to advance at an unprecedented pace, modern robots perceive through multimodal sensors, interpret context using AI models, and translate those interpretations into physical action. As they move into dynamic environments, their safety increasingly depends on the integrity of the data guiding their decisions.</p><p>That dependence creates risks that conventional safety assessments may not fully capture. Recent research has demonstrated that manipulating what a robot sees, hears, or interprets can influence its behavior without requiring direct control.</p><p>Such manipulation can occur anywhere across its complex sensing and decision-making system — a layered attack surface encompassing training pipelines, system infrastructure, and runtime perception.</p><h2>Layer One: Corrupting intelligence at its source</h2><p>In 2017, <a href="https://arxiv.org/abs/1708.06733" rel="noopener noreferrer" target="_blank">BadNets</a> demonstrated that a model could behave normally under most conditions, yet fail in the presence of a specific hidden trigger. In one example, a subtle pattern caused a stop sign to be misclassified as a speed limit sign without affecting the model’s behavior on other inputs.</p><p>What began as a classification vulnerability has since evolved into action manipulation.</p><p>At NeurIPS 2025, researchers introduced <a href="https://arxiv.org/abs/2505.16640" rel="noopener noreferrer" target="_blank">BadVLA</a><strong> </strong>a backdoor attack targeting Vision-Language-Action (VLA) models that allow robots to see, interpret instructions, and produce coordinated physical movement. Rather than altering a single label, the attack caused conditional deviations in the robot’s action trajectory when a trigger was present. Without the trigger, the model largely preserved normal task performance, while the backdoor remained effective under task transfers and model fine-tuning.</p><p>A related study in 2025, <a href="https://arxiv.org/abs/2510.09269" rel="noopener noreferrer" target="_blank">GoBA</a>, showed that ordinary objects such as a coffee mug could serve as a reliable trigger. The researchers reported a 97 percent attack success rate without degrading performance on clean inputs.</p><p class="pull-quote">A critical safety question today is whether Physical AI models remain within their task and safety boundaries under adversarial conditions.</p><p>These studies expose a blind spot in model validation: A model may pass testing yet produce corrupted behavior when a hidden trigger appears in operation.</p><p>So a critical safety question today is whether Physical AI models remain within their task and safety boundaries under adversarial conditions. <a href="https://vicone.com/company/press-releases/vicone-turns-def-con-34-robot-hacking-research-into-free-nvidia-isaac-sim-extension?utm_source=ieee-spectrum&utm_medium=sponsored-content&utm_campaign=2026-09" rel="noopener noreferrer" target="_blank">Simulation tools</a> such as NVIDIA Isaac Sim, when paired with <a href="https://vicone.com/products/radeis?utm_source=ieee-spectrum&utm_medium=sponsored-content&utm_campaign=2026-09" target="_blank">VicOne Radeis</a>, can test the effects of manipulated inputs before deployment.</p><p class="shortcode-media shortcode-media-youtube"> <span class="rm-shortcode" data-rm-shortcode-id="fe238fbc85e0e9d5ab228b9941e03b92" style="display:block;position:relative;padding-top:56.25%;"><iframe frameborder="0" height="auto" lazy-loadable="true" scrolling="no" src="https://www.youtube.com/embed/SJH5PFiqQQ8?rel=0" style="position:absolute;top:0;left:0;width:100%;height:100%;" width="100%"></iframe></span> <small class="image-media media-caption" placeholder="Add Photo Caption...">VicOne LAB R7 demonstrates Radeis, a Physical AI safety validator for NVIDIA Isaac Sim that tests how adversarial visual inputs affect robot behavior before deployment.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">VicOne</small></p><h2>Layer Two: System vulnerabilities as gateways to AI control</h2><p>Even a securely trained model can be subverted if the surrounding system stack is vulnerable.</p><p>In September 2025, researchers disclosed <a href="https://github.com/Bin4ry/UniPwn" rel="noopener noreferrer" target="_blank">UniPwn</a>, a Bluetooth <a href="https://spectrum.ieee.org/unitree-robot-exploit" target="_blank">exploit chain affecting quadruped and humanoid robots</a> from a major manufacturer. Hardcoded cryptographic keys allowed traffic decryption, authentication checks were bypassed, and command injection enabled root-level execution. The exploit is also described as “wormable.” A compromised robot could scan nearby units and potentially affect an entire fleet.</p><p class="shortcode-media shortcode-media-youtube"> <span class="rm-shortcode" data-rm-shortcode-id="5b91ed786a1def3b7559894e9734b569" style="display:block;position:relative;padding-top:56.25%;"><iframe frameborder="0" height="auto" lazy-loadable="true" scrolling="no" src="https://www.youtube.com/embed/v0i_0Or4ytU?rel=0" style="position:absolute;top:0;left:0;width:100%;height:100%;" width="100%"></iframe></span> <small class="image-media media-caption" placeholder="Add Photo Caption...">VicOne Lab R7’s demo shows how chaining three wireless exploits can trigger uncontrolled robot behavior within 60 seconds, resulting in operational disruption.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">VicOne</small></p><p><span>Middleware creates another exposure point. Vulnerabilities in <a href="https://www.ros.org/" target="_blank">ROS 2</a> and DDS-based systems can enable arbitrary code execution or abuse unauthenticated topics to deliver malicious commands. With sufficient access, an attacker could override motor commands or replace AI model weights without directly attacking the model architecture.</span></p><p>In this case, the components may still function as designed. What has changed is the trustworthiness of the commands flowing through the system. Vulnerability management can help teams identify known risks before deployment, while continuous monitoring can surface emerging threats.</p><h2>Layer Three: Manipulating perception and reasoning at runtime</h2><p>At runtime, manipulating inputs that shape perception or reasoning may require neither firmware modification nor a network breach.</p><p>In 2024, <a href="https://robopair.org/" target="_blank">RoboPAIR</a><strong> </strong>demonstrated how carefully structured prompts could redirect LLM-controlled robots into unsafe trajectories. <a href="https://arxiv.org/abs/2407.20242" target="_blank">BadRobot</a><strong> </strong>exposed a deeper architectural weakness: in several cases, a robot verbally refused a dangerous command while its motion controller executed the action anyway.</p><p>Vision-based manipulation is equally powerful. <a href="https://arxiv.org/abs/2411.13587" target="_blank">VLAttack</a><strong> </strong>showed that an adversarial patch within the camera’s view could reduce a VLA model’s task success rate to zero. <a href="https://arxiv.org/abs/2509.19870" target="_blank">FreezeVLA</a><strong> </strong>showed that a single adversarial image could freeze a robot’s decision-making loop, making it unresponsive to subsequent instructions.</p><p class="pull-quote">Runtime assurance must therefore look beyond whether individual components remain available and assess whether cyber events are beginning to affect physical behavior.</p><p>In each case, the camera may still work, the model may still run, and the controller may still respond. Yet the resulting behavior can be unsafe because the robot is acting on manipulated perception or reasoning.</p><p>Runtime assurance must therefore look beyond whether individual components remain available and assess whether cyber events are beginning to affect physical behavior. Security event correlation, behavioral-impact assessment, and policy-bounded response supported by edge AI, can help contain the affected path without unnecessarily stopping the entire robot fleet.</p><h2>From point-in-time safety to lifecycle assurance</h2><p>The risks across these three layers reveal the missing layer in robot safety assurance: cybersecurity. Functional safety addresses failures and unexpected operating conditions; cybersecurity extends that assurance to deliberate manipulation, including attacks that may leave the underlying system apparently functional.</p><p>This requires assurance across the robot’s lifecycle. During design, teams need to understand which cyber risks could invalidate assumptions behind intended behavior. Before deployment, they should test whether realistic attacks can cause a robot to deviate from its task or safety boundaries. In operation, monitoring should identify whether cyber events are beginning to affect behavior, contain the affected path, and preserve safe operation where possible.</p><p class="shortcode-media shortcode-media-rebelmouse-image"> <img alt="Diagram of end\u2011to\u2011end AI robot security from development to operation monitoring" class="rm-shortcode" data-rm-shortcode-id="3a5c07555be0c79667c536a20f66a2f2" data-rm-shortcode-name="rebelmouse-image" id="097ea" loading="lazy" src="https://spectrum.ieee.org/media-library/diagram-of-end-u2011to-u2011end-ai-robot-security-from-development-to-operation-monitoring.jpg?id=67745953&width=980"/> <small class="image-media media-caption" placeholder="Add Photo Caption...">VicOne’s lifecycle approach combines AI model and vulnerability scanning, simulation-based validation, and continuous monitoring to help secure robots from development through operation.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">VicOne</small></p><p><span>While cybersecurity does not replace functional safety, it helps ensure that Physical AI remains within acceptable boundaries even when what it sees, decides, or does is under attack.</span></p><p>For a deeper look at the cybersecurity risks and defense strategies shaping autonomous robotics, download our whitepaper “<a href="https://info.vicone.com/ai-robotics-security-risk-whitepaper?utm_source=ieee-spectrum&utm_medium=sponsored-content&utm_campaign=2026-09" target="_blank">Securing the Rise of AI Robots: Cyber Risks, Real-World Threats, and Defense Strategies</a>.”</p> Reference: https://ift.tt/VUzBLXk

The Mind-bending Joyrides That Gave Rise to Tesla

<img src="https://spectrum.ieee.org/media-library/a-collage-shows-four-men-and-two-sports-cars-one-red-and-one-yellow.jpg?id=67759786&width=1245&height=700&coordinates=0%2C187%2C0%2C187"/><br/><br/><p><strong>In 2003, Martin Eberhard, </strong>a cofounder of <a href="https://www.tesla.com/" rel="noopener noreferrer" target="_blank">Tesla Motors</a>, decided it was time to start wooing investors. To do that, however, he needed an electric car. So he talked to <a href="https://heritageproject.caltech.edu/interviews/alan-cocconi" rel="noopener noreferrer" target="_blank">Alan Cocconi</a> and asked if he could borrow the <a href="https://en.wikipedia.org/wiki/AC_Propulsion_tZero" rel="noopener noreferrer" target="_blank">tZero</a>, the revolutionary and blazingly fast electric roadster that <a href="https://web.archive.org/web/19980131092458/http://www.scientificamerican.com/0597issue/0597profile.html" rel="noopener noreferrer" target="_blank">Cocconi</a> had built at <a href="https://en.wikipedia.org/wiki/AC_Propulsion" rel="noopener noreferrer" target="_blank">AC Propulsion</a>.</p><div class="rm-embed embed-media"><iframe height="110px" id="noa-web-audio-player" src="https://embed-player.newsoveraudio.com/v4?key=q5m19e&id=https://spectrum.ieee.org/elon-musk-tesla?draft=1&bgColor=F5F5F5&color=1b1b1c&playColor=1b1b1c&progressBgColor=F5F5F5&progressBorderColor=bdbbbb&titleColor=1b1b1c&timeColor=1b1b1c&speedColor=1b1b1c&noaLinkColor=556B7D&noaLinkHighlightColor=FF4B00&feedbackButton=true" style="border: none" width="100%"></iframe></div><p><span>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. </span><a href="https://www.linkedin.com/in/martin-eberhard-1441931/" target="_blank">Eberhard</a><span> was joined by </span><a href="https://www.forbes.com/2010/08/19/tesla-bmw-tzero-technology-tom-gage.html" target="_blank">Tom Gage</a><span>, 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.</span></p><h3></h3><br/><img alt="Image of a book cover featuring a head-on view of a yellow sports car." class="rm-shortcode" data-rm-shortcode-id="01a893ebcfb7f878acb5912cdfbd4d18" data-rm-shortcode-name="rebelmouse-image" id="b54ff" loading="lazy" src="https://spectrum.ieee.org/media-library/image-of-a-book-cover-featuring-a-head-on-view-of-a-yellow-sports-car.jpg?id=67759854&width=980"/><p>In December 2003, Eberhard also proposed a demo at <a href="https://en.wikipedia.org/wiki/Buck%27s_of_Woodside" target="_blank">Buck’s of Woodside</a>, 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. <a href="https://en.wikipedia.org/wiki/Martin_Eberhard" target="_blank">Eberhard</a>’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.</p><p>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 <em><em>g</em></em> forces piled up, the VC was literally unable to touch the dashboard. That was how powerful the tZero’s acceleration was, Eberhard would say.</p><p>Many of the VCs were astounded. Some even questioned whether the car was really electric. Many owned Ferraris and Lamborghinis. They knew sports cars—but this? They could never have imagined it was possible to do this with an electric drivetrain.</p><p class="shortcode-media shortcode-media-rebelmouse-image"> <img alt="A yellow sports car is parked in a restaurant parking lot next to a boxy white vanlike vehicle." class="rm-shortcode" data-rm-shortcode-id="bc1e3cba098a3537e093f44a1b800f3a" data-rm-shortcode-name="rebelmouse-image" id="7f326" loading="lazy" src="https://spectrum.ieee.org/media-library/a-yellow-sports-car-is-parked-in-a-restaurant-parking-lot-next-to-a-boxy-white-vanlike-vehicle.jpg?id=67759866&width=980"/> <small class="image-media media-caption" placeholder="Add Photo Caption...">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.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Martin Eberhard</small></p><p>Still, the demo at Buck’s garnered little investor interest—with one exception. <a href="https://about.google/" target="_blank">Google</a> cofounders <a href="https://en.wikipedia.org/wiki/Sergey_Brin" target="_blank">Sergey Brin</a> and <a href="https://en.wikipedia.org/wiki/Larry_Page" target="_blank">Larry Page</a> 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.</p><p>The man’s name was <a href="https://en.wikipedia.org/wiki/Elon_Musk" target="_blank">Elon Musk</a>.</p><h2>Elon Musk, Meet the tZero</h2><p>In 2004, it wasn’t apparent to anyone that Elon Musk had a future in the auto industry. He was notable for cofounding <a href="https://www.paypal.com/us/home" target="_blank">PayPal</a>, which he then sold to eBay in 2002 for a whopping US $1.5 billion. He had already launched Space Exploration Technologies Corp., or <a href="https://www.spacex.com/" target="_blank">SpaceX</a>, 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.</p><p class="shortcode-media shortcode-media-rebelmouse-image rm-float-left rm-resized-container rm-resized-container-25" data-rm-resized-container="25%" style="float: left;"> <img alt="A portrait of a smug-looking man with thinning hair, lit from the side, and wearing a black shirt." class="rm-shortcode" data-rm-shortcode-id="e511fabf7280f00061c0ffd1f7ef62d5" data-rm-shortcode-name="rebelmouse-image" id="b22e5" loading="lazy" src="https://spectrum.ieee.org/media-library/a-portrait-of-a-smug-looking-man-with-thinning-hair-lit-from-the-side-and-wearing-a-black-shirt.jpg?id=67759875&width=980"/> <small class="image-media media-caption" placeholder="Add Photo Caption...">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.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Patrick Tehan/MediaNews Group/Bay Area News/Getty Images</small></p><p>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. (<a href="https://en.wikipedia.org/wiki/J._B._Straubel" target="_blank">Straubel</a> 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?”</p><p>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.”</p><p class="shortcode-media shortcode-media-rebelmouse-image"> <img alt="Two pictures, each showing a bespectacled man." class="rm-shortcode" data-rm-shortcode-id="0440ea7304c571a4fbd494f00605eb86" data-rm-shortcode-name="rebelmouse-image" id="8ecf8" loading="lazy" src="https://spectrum.ieee.org/media-library/two-pictures-each-showing-a-bespectacled-man.jpg?id=67760366&width=980"/> <small class="image-media media-caption" placeholder="Add Photo Caption...">Two of the principals behind AC Propulsion were businessman Tom Gage, left, and engineering genius Alan Cocconi.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Left: Tom Gage; Right: Alec Brooks</small></p><p>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.</p><p>There was a void in the market, he said. GM had abandoned the <a href="https://news.gm.com/home.detail.html/Pages/news/us/en/2026/mar/0311-ev1.html" target="_blank">EV1</a>. Toyota, Honda, Ford, and Chrysler were shutting down their electric car programs. California’s <a href="https://ww2.arb.ca.gov/our-work/programs/zero-emission-vehicle-program" target="_blank">zero-emission vehicle</a> (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 <a href="https://en.wikipedia.org/wiki/Scion_(automobile)" target="_blank">Toyota Scion</a>.</p><p class="shortcode-media shortcode-media-rebelmouse-image"> <img alt="A boxy white vehicle is seen with its front hood raised." class="rm-shortcode" data-rm-shortcode-id="10e518eb14e5210a6126d7d210f10420" data-rm-shortcode-name="rebelmouse-image" id="15958" loading="lazy" src="https://spectrum.ieee.org/media-library/a-boxy-white-vehicle-is-seen-with-its-front-hood-raised.jpg?id=67760396&width=980"/> <small class="image-media media-caption" placeholder="Add Photo Caption...">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.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Jeff Chiu/AP</small></p><p>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.</p><p>He wasn’t interested in the eBox. He then drove the tZero and offered to buy it.</p><p class="shortcode-media shortcode-media-rebelmouse-image"> <img alt="A two-seat yellow roadster." class="rm-shortcode" data-rm-shortcode-id="6a979b8c51ec920e2b74dd6db5f3c3a6" data-rm-shortcode-name="rebelmouse-image" id="2c7e5" loading="lazy" src="https://spectrum.ieee.org/media-library/a-two-seat-yellow-roadster.jpg?id=67760425&width=980"/> <small class="image-media media-caption" placeholder="Add Photo Caption...">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. </small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Scott Sorbe</small></p><p>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.</p><p>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 <a href="https://www.vanityfair.com/news/2007/05/tesla200705?" target="_blank">interview with <em><em>Vanity Fair</em></em> magazine</a>. “I wouldn’t want to drive it. My wife certainly wouldn’t want to drive it.”</p><p>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.</p><p class="shortcode-media shortcode-media-rebelmouse-image"> <img alt="A man wearing white sneakers and blue jeans stands next to a yellow roadster with a bright red dashboard." class="rm-shortcode" data-rm-shortcode-id="bbd409dd18104abc9a15b1ba55e0a12e" data-rm-shortcode-name="rebelmouse-image" id="5862c" loading="lazy" src="https://spectrum.ieee.org/media-library/a-man-wearing-white-sneakers-and-blue-jeans-stands-next-to-a-yellow-roadster-with-a-bright-red-dashboard.jpg?id=67760481&width=980"/> <small class="image-media media-caption" placeholder="Add Photo Caption...">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.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Martin Eberhard</small></p><p>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.”</p><p>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.”</p><h2>Elon Musk, Meet Tesla Motors</h2><p>As it happens, Eberhard and <a href="https://en.wikipedia.org/wiki/Marc_Tarpenning" target="_blank">Marc Tarpenning</a>, 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, they saw him speak at a <a href="https://www.marssociety.org/" target="_blank">Mars Society</a> conference at Stanford University. Musk had talked about the rather improbable idea of sending mice to Mars. The presentation gave them a window into Musk’s unconventional approach to high-tech entrepreneurism and to life in general.</p><p>Eberhard and Musk agreed to meet, and then Eberhard emailed Gage. “Any chance of my borrowing the car for next week?” he wrote. Gage, of course, complied.</p><p class="shortcode-media shortcode-media-rebelmouse-image"> <img alt="A smiling man in a striped shirt stands next to an electric motor." class="rm-shortcode" data-rm-shortcode-id="39a2f4dddc5d435fce1a37912b24737b" data-rm-shortcode-name="rebelmouse-image" id="15a62" loading="lazy" src="https://spectrum.ieee.org/media-library/a-smiling-man-in-a-striped-shirt-stands-next-to-an-electric-motor.jpg?id=67760495&width=980"/> <small class="image-media media-caption" placeholder="Add Photo Caption...">Martin Eberhard posed next to an electric motor at Tesla’s San Carlos, Calif., headquarters in 2006. </small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Paul Sakuma/AP</small></p><p>By this time, Tesla was nine months old. It still had just three employees—Eberhard, Tarpenning, and <a href="https://spectrum.ieee.org/ian-wright-in-the-fast-lane" target="_self">Ian Wright</a>, a New Zealand-born engineer and neighbor of Eberhard’s. The founders were arranging to pay the licensing fee on AC Propulsion’s drivetrain technology. And they were making arrangements to build their first cars using the chassis of the Lotus Elise two-seat roadster. They estimated they needed $6.5 million to go further. And that’s where Musk came in.</p><p class="shortcode-media shortcode-media-rebelmouse-image"> <img alt="A yellow roadster is displayed in a museum setting." class="rm-shortcode" data-rm-shortcode-id="19b68c295c17d5647637bc650f49afbd" data-rm-shortcode-name="rebelmouse-image" id="4717c" loading="lazy" src="https://spectrum.ieee.org/media-library/a-yellow-roadster-is-displayed-in-a-museum-setting.jpg?id=67760615&width=980"/> <small class="image-media media-caption" placeholder="Add Photo Caption...">The original Tesla Roadster prototype, or “Mule,” was built inside the chassis of a 2002 Lotus Elise. </small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Dylan Stewart/Image of Sport/Sipa/Alamy</small></p><p>Eberhard and Wright flew to Los Angeles on a Friday and met Musk in his cubicle at SpaceX. The meeting was supposed to last a half hour, but Musk’s questions came virtually nonstop, and as the meeting progressed, he repeatedly shouted to his assistant to cancel his next meeting.</p><p>Over the following weekend, Musk called Tarpenning to get his input about their financial model. “I just remember responding, responding, and responding,” Tarpenning said, according to a <a href="https://www.harpercollins.com/products/elon-musk-ashlee-vance?variant=32161254932514" target="_blank">2015 book by Ashlee Vance</a>.</p><p>The Tesla founders were all impressed with Musk. He was unlike any of the VCs they’d met with in the previous months. He was technically astute. He’d earned a bachelor’s degree in physics from the <a href="https://www.upenn.edu/" target="_blank">University of Pennsylvania</a>, and in his two-day stint as a Ph.D. student at Stanford, he’d intended to do a dissertation on solid-state capacitors for use in electric cars.</p><p>Moreover, he wasn’t averse to risk—at least not intelligent risk. He loved technical challenges, and he loved proving that the impossible was possible. “You’re presenting an electric car company to this person on the other side of the table, and he’s doing something even crazier,” Tarpenning said later. “He’s building rocket ships.”</p><p>On the Monday after their first meeting at SpaceX, Eberhard and Tarpenning flew back to Los Angeles. Musk agreed to invest $6.35 million. He would become the biggest shareholder as well as chairman of the company.</p><p>Now, Tesla Motors was really in business. All it needed was someone to design and build a groundbreaking electric car.</p><h2>“All Electric Cars Have Sucked”</h2><p>No one at AC Propulsion believed that Tesla Motors had even a remote chance of success. The whole idea—building and selling electric vehicles and competing against the giants in Detroit, Japan, and Germany—seemed impossible. Even Toyota, which was having so much success with the hybrid Prius, was not planning to build pure electric cars.</p><p>The prospect of starting any kind of auto company was unbelievably daunting. Automotive startups had been the undoing of many ambitious entrepreneurs, including Henry Kaiser, Preston Tucker, and John DeLorean. Such endeavors required mountains of money, connections, and expertise. There were unseen obstacles around every corner. And the people who’d launched Tesla, as smart as they were, were almost certainly unprepared for what lay ahead.</p><p>Years later, Musk would contend that their struggles were caused by the fact that Tesla had been founded on “two false premises.” The first was that Tesla’s founders believed they could simply convert an existing gasoline sports car to electric. The second was that they could use the existing AC Propulsion technology with little or no modification. “That turned out to be, in retrospect, staggeringly dumb,” Musk said.</p><p class="shortcode-media shortcode-media-rebelmouse-image"> <img alt="Four men cluster around a partially build yellow roadster." class="rm-shortcode" data-rm-shortcode-id="3fb071fa0fb228eb744bcee344a1a63b" data-rm-shortcode-name="rebelmouse-image" id="06aaa" loading="lazy" src="https://spectrum.ieee.org/media-library/four-men-cluster-around-a-partially-build-yellow-roadster.jpg?id=67762460&width=980"/> <small class="image-media media-caption" placeholder="Add Photo Caption...">In April or May of 2004, Tesla engineers worked on an early test vehicle, or “mule,” of the Roadster. The group included (clockwise from upper left) mechanical engineer Gene Berdechevsky, in the pink shirt, electrical engineer Phil Cole, and mechanical engineer Dave Lyons, in the dark blue shirt.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Martin Eberhard</small></p><p>He also later concluded that their early path almost doomed them. “It ended up being much worse than if we had designed the car from scratch,” he said. But Tesla decided it could not go back and start over. It could only deal with the problem at hand.</p><p>Eberhard and Tarpenning were terrified of going into production with the <a href="https://www.innovatorsunder35.com/the-list/jb-straubel/" target="_blank">existing analog motor controller</a> and drivetrain electronics, which were unreliable and jittery. If those problems weren’t fixed, they knew their new vehicle would fail, and so would the company.</p><p>Another looming issue was the safety of the Tesla lithium-ion battery pack. To test it, Eberhard brought the engineering team to his home, where they dug a pit in his backyard. They took a brick of cells, covered it with a sheet of Plexiglass, and then remotely heated one of the cells with an electrical wire. As they expected, the heated cell <a href="https://spectrum.ieee.org/teslas-lithiumion-battery-catches-fire-" target="_blank">burst into flame</a>, setting neighboring cells on fire. The cells went off one at a time—pop, pop, pop. “We had a conflagration,” Eberhard said. “One cell caught fire, and it blasted right through the pack.”</p><p>Buyers of sports cars were known to be forgiving. In their quest for performance, they could put up with poor reliability. But the fire hazard was another matter, and one that had the potential to take down the company. Eberhard took the news right to Tesla’s board of directors. “It was my first big oh-shit moment to my board,” he said. “I told them we’ll have a day-to-day schedule stop until we figure this out.”</p><p>Working with friends from his Stanford days, Straubel began developing a new pack in his garage. The team acquired 7,000 lithium-ion cells from LG Chem, then constructed battery bricks, each with 69 cells, and tested them with different kinds of liquid-cooling systems. By October 2004, they’d finished a prototype pack and used a crane to lower it into the back of a Lotus Elise sportscar.</p><p>A few months later—in January 2005—the team had completed a working prototype of that first car. At the end of the month, they showed it off at a board meeting, and Musk took it for a spin. Impressed by its performance, he invested $9 million more, and Tesla completed a $13 million round of funding. Now the vehicle had a name—Roadster—and a tentative production schedule. The plan was to begin delivering it to customers in early 2006.</p><p>Tesla’s struggles with the Roadster were not apparent to the outside world, especially to those invited to the <a href="https://motorillustrated.com/tesla-roadster-prototype-was-unveiled-14-years-ago-today/53257/" target="_blank">reveal of the Roadster</a> at the Santa Monica Airport in July 2006. By then, the yellow test car, or “mule,” had evolved into two prototypes: a red car and a black car, both of which would be available for drives at the event.</p><p class="shortcode-media shortcode-media-rebelmouse-image"> <img alt="A black two-seat roadster. " class="rm-shortcode" data-rm-shortcode-id="fd8a83761109b8e83aa3078ae4c4b3c3" data-rm-shortcode-name="rebelmouse-image" id="80adb" loading="lazy" src="https://spectrum.ieee.org/media-library/a-black-two-seat-roadster.jpg?id=67760684&width=980"/> <small class="image-media media-caption" placeholder="Add Photo Caption...">Tesla unveiled the Roadster, its first vehicle, at the Santa Monica, Calif., airport on 19 July, 2006.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Glenn Koenig/Los Angeles Times/Getty Images</small></p><p>The prototypes were more advanced than the mule, with more of a production-type design. But Musk and the team didn’t know what to expect at the reveal. The company was just coming out of stealth mode, and at that point, Tesla had received no media coverage. It had no customers, no deposits, and no sales team.</p><p>Still, Musk planned a huge party for the unveiling—an “awesome event,” in his words, staged inside the airport’s Barker Hangar. He told his personal assistant to invite 350 guests, including Michael Eisner of Disney, movie producer Richard Donner, actor Ed Begley Jr., California Governor Arnold Schwarzenegger, and many other luminaries. All were told to bring their checkbooks in case they wanted to write a $100,000 check to put a deposit on an electric Roadster. Meanwhile, a Roadster prototype zipped around a makeshift road inside the hangar, out the door, down a runway, and back inside again.</p><p>Musk took center stage, telling the audience that they were witnessing the start of a new era in automotive technology, according to <a href="https://www.cnet.com/roadshow/news/electric-sports-car-packs-a-punch-but-will-it-sell/" target="_blank">CNET’s coverage of the event</a>. “Until today, all electric cars have sucked,” he told the audience. “Electric cars play into the strength of Silicon Valley. A lot of the things inside the car are conventional automobile technology. The magic is the battery technology and the software and the controllers.”</p><h2>Tesla Hooks Arnold Schwarzenegger, George Clooney</h2><p>Musk’s message was perfect for such an event, especially for the dozens of reporters who were there to publicize the reemergence of the electric car. They adored the <a href="https://grubermotors.com/a-brief-tesla-roadster-history/" target="_blank">Roadster</a>. It was small, powerful, electric, and above all, cool. It was anti-Detroit—a new kind of car that burned no gasoline and was born in Silicon Valley instead of an antiquated factory in Michigan.</p><p>The night was also a financial success for Tesla, with twenty $100,000 checks gathered from prospective buyers. And the momentum continued. A few days after the event, <a href="https://en.wikipedia.org/wiki/Joe_Francis" target="_blank">Joe Francis</a>, creator of the adult entertainment franchise Girls Gone Wild, sent an armored truck to Tesla’s San Carlos office to drop off $100,000 in cash. A few days after that, Schwarzenegger put his money down, as did actor George Clooney. Within two weeks, Tesla had presold 127 Roadsters.</p><p class="shortcode-media shortcode-media-rebelmouse-image"> <img alt="Man sitting in a black sports car indoors, surrounded by photographers and onlookers" class="rm-shortcode" data-rm-shortcode-id="760a6b888eefc6295484f5b270298b82" data-rm-shortcode-name="rebelmouse-image" id="eb815" loading="lazy" src="https://spectrum.ieee.org/media-library/man-sitting-in-a-black-sports-car-indoors-surrounded-by-photographers-and-onlookers.jpg?id=67760691&width=980"/> <small class="image-media media-caption" placeholder="Add Photo Caption...">California Governor Arnold Schwarzenegger was among the first buyers of the Tesla Roadster on the day the car was officially unveiled, 19 July, 2006.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Glenn Koenig/Los Angeles Times/Getty Images</small></p><p>Meanwhile, though, the company’s manufacturing woes continued. The mechanical problems weren’t even the biggest issue. The biggest issue was the supply chain. This was ironic, because some in the media admired Tesla for its global approach. They liked the fact that the battery pack, the motor, the chassis, and the assembly had an international flavor. It was a world car, they thought.</p><p>But for Tesla, it was a nightmare. The battery pack was being assembled in Thailand by a manufacturer of barbecue grills. The facility was 3 hours from Bangkok, literally in a jungle where the heat was almost unbearable, and the factory building consisted of a truss roof held up by some steel columns. There were no walls because no one there wanted to work indoors.</p><p>And because the pack assembler was inexperienced, Tesla engineers were repeatedly flying to and from Thailand to direct the effort. They would find animal droppings on the battery packs, which were sitting out in the open air all day and all night.</p><p>For the umpteenth time, Musk wondered if the company would be able to survive. “We’re doomed if we don’t in-source the battery pack,” he told one of Tesla’s manufacturing engineers, “because we have a supplier in Thailand who is great at making barbecues but not great at battery packs. And the supply chain is so long that it takes six months from when the cells are built to when the battery pack is done and in a car. So that means the capital cost is gigantic because we have to pay for all that inventory and process. And inevitably, there are mistakes in the design or fabrication of the battery pack, and then we have six months’ worth of battery packs that don’t work.”</p><p>Never mind that this chaotic approach was central to their plan. Tesla had never been envisioned as an old-fashioned, Detroit-style, vertically integrated manufacturer. From the beginning, it had been a Silicon Valley–type enterprise that would rely on others for the bulk of its manufacturing. Only now, as the fledgling company sent batteries and motors and assembled cars back and forth across two oceans, was its plan beginning to appear untenable. “We had this misguided idea that everything must be cheaper and better if built in Asia,” Straubel later said.</p><h2>Tesla’s Chances of Success: 10 Percent</h2><p>From the beginning, Musk had never been optimistic about Tesla’s chance of success. He repeatedly said he thought it was approximately 10 percent. “In 2004, the idea of starting a car company was extremely stupid,” he said. “The idea of starting an electric car company was stupid squared.” As he watched Tesla struggle with its supply chain, his earlier words were starting to look prescient.</p><p>The only chance, the engineering team concluded, was to bring the manufacturing of all of the subsystems, such as the battery packs, motors, and inverters, in-house. They disassembled their overseas operations and moved them to California, starting with battery pack manufacturing. Assembly stations were loaded into huge shipping containers, transported back to one of the company’s new facilities on Bing Street in San Carlos, and then reassembled there. It took five and a half months. They also redesigned the battery packs and developed machines for automating their assembly.</p><p class="shortcode-media shortcode-media-rebelmouse-image"> <img alt="A balding man in a blue sweater with light stubble on his chin sits under an engineering drawing of an electric roadster." class="rm-shortcode" data-rm-shortcode-id="582d9358b5474d40467a9bc26c1727e2" data-rm-shortcode-name="rebelmouse-image" id="d9af0" loading="lazy" src="https://spectrum.ieee.org/media-library/a-balding-man-in-a-blue-sweater-with-light-stubble-on-his-chin-sits-under-an-engineering-drawing-of-an-electric-roadster.jpg?id=67760704&width=980"/> <small class="image-media media-caption" placeholder="Add Photo Caption...">In 2008, with mass production of the Tesla Roadster just getting underway, Elon Musk gave an interview at the company’s headquarters, then in San Carlos in northern California. At the time, Tesla was merely a startup in a precarious position, bleeding cash and grappling with many manufacturing problems.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Ryan Anson/Bloomberg/Getty Images</small></p><p>Musk concluded that the key to success was not the design of the car itself but rather the manufacturing. Henry Ford had reached the same conclusion a hundred years earlier. It was “the realization of how important it is to build the machine that builds the machine,” Musk said at the Tesla Annual Shareholder Meeting in 2016. “And how much harder it is to build the manufacturing system that builds the product, than it is to create the product in the first place. You can create a demo version of a product…with a small team in maybe three to six months. But to build the machine that builds the machine takes at least a hundred to a thousand times more resources and difficulty.”</p><p>Gradually, Tesla’s idea of letting others do its manufacturing slipped away. Packs were built in San Carlos, and then installed in the Lotus Elise chassis there instead of in England.</p><p>“We had control now,” said manufacturing engineer Jason Mendez. “We had all the engineers there. We didn’t have batteries on the water, not from Thailand to England and not from England to here.”</p><p>Musk began to talk about a new vision. He called it the gigafactory. Raw materials would enter at one end, and a car would exit at the other end. This was the ultimate in vertical integration, and it sounded a lot like Henry Ford’s vision for the River Rouge plant in Dearborn, Mich., in 1917.</p><p>Tesla Motors was becoming an auto manufacturer.</p> Reference: https://ift.tt/13CIksP