Tesla was incorporated (as Tesla Motors) on July 1, 2003, by
Martin Eberhard and
Marc Tarpenning in San Carlos, California. The founders were influenced to start the company after
General Motors recalled all its
EV1 electric cars in 2003 and then destroyed them, and seeing the higher
fuel efficiency of battery-electric cars as an opportunity to break the usual correlation between high performance and low
fuel economy in automobiles. The
AC Propulsion tzero also inspired the company's first vehicle, the
Roadster. Eberhard said he wanted to build "a car manufacturer that is also a technology company", with its core technologies as "the battery, the computer software, and the proprietary motor".
Ian Wright was the third employee, joining a few months later. The three went looking for
venture capital (VC) funding in January 2004 and connected with
Elon Musk, who contributed US$6.5 million of the initial (
Series A) US$7.5 million round of investment in February 2004 and became chairman of the board of directors.