Did Elon Musk Think Tesla Would Succeed At The Time Of Its Inception?

Tesla, Inc. TSLA has emerged as the leader in the electric vehicle market, although competition from EV startups and traditional automakers transitioning to green energy vehicles could eventually lead to an erosion in its massive market share.

As is the case with any startup, Tesla also had its share of growing pains and moments of doubt before it grew into a force to reckon with in the EV arena.

What Happened: Tesla CEO Elon Musk said when the EV pioneer started out, he gave less than 10% chances of the company succeeding, while others weren't as optimistic, giving him a zero chance of success.

Musk's confession came in the form of a reply to an observation by a Twitter user that Tesla started because many big car manufacturers were shutting down EV programs. Tesla's intention was not to avail government incentives or make money but the EV maker felt it was the only chance of creating an EV company, he said. 

The Tesla CEO also noted that there were no EV incentives then and gasoline was "super cheap," making the case for electric cars a tough proposition.

There were no EV incentives (nor did we expect them) & gasoline was super cheap, so tough to make the case for electric cars.

My guess was that we had <10% chance of success & most people thought 0%. The history car startups is just one big graveyard.

— Elon Musk (@elonmusk) November 19, 2021

Related Link: Why Tesla Is Potentially Disruptive For Legacy Players (A $15,000 EV Is One Of The Reasons)

Why It's Important: Tesla was founded in July 2003 and Musk took over the very next year through a $6.5-million investment in the company.

After unsuccessful efforts with its first model — The Roadster — in 2009, Tesla made available its Model S sedan in 2012 and followed it up with the Model X SUV in 2015. Tesla's fortunes began to change only after the introduction of the more affordable Model 3 sedan focused on the mass market in 2017.

Success did not come easy for Tesla, and this was recounted by Musk himself in a tweet in November 2020. The period between mid-2017 and mid-2019 was a period of extreme stress and pain given the production and logistics issues associated with the ramp of the Model 3.

Tesla now has a 16% share of the overall global EV market as of the first half of 2021 and it now commands roughly about two-thirds of the U.S. EV market. The company recently joined the $1-trillion market cap club, indicative of the premium investors are willing to pay for the stock.

TSLA Price Action: Tesla shares were trading 0.98% higher Friday morning at $1,107.