Why Tesla's Elon Musk Must Sell 6 Million Electric Cars To Make History

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Henry J. Kaiser and Elon Musk, CEO, Tesla Motors [Kaiser image courtesy Kaiser Permanente]

Henry J. Kaiser and Elon Musk, CEO, Tesla Motors [Kaiser image courtesy Kaiser Permanente]

Many entrepreneurs have tried to start car companies in the U.S. over the past century, but the last person to do so from the ground up with a brand that survives to this day was Walter P. Chrysler.

He started his company in December 1924--which indicates the magnitude of the challenge faced by Elon Musk, CEO of startup electric-car maker Tesla Motors.

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But there's one entrepreneur, largely forgotten even in the car industry today, who came closer than any other to launching a successful company--and he's the man Musk has to beat before Tesla can be deemed the most successful startup in 90 years.

2014 Tesla Model S

2014 Tesla Model S

It's not Preston Tucker, or Henrik Fisker, or Malcolm Bricklin, or even John Delorean.

Tesla, with roughly 50,000 cars made to date, has surpassed all four of their companies: Delorean built 9,000 cars, Fisker up to 3,000, Bricklin 2,850, and Tucker a mere 51.

All but forgotten

The man Musk must beat is Henry J. Kaiser (1882-1967), one of the greatest industrialists of the 20th century.

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His car company, Kaiser-Frazer (later Kaiser Motors), is all but forgotten today. But it built a staggering 750,000 cars over its nine years of production, from 1947 through 1955.

Kaiser Manhattan - top

Kaiser Manhattan - top

It's important to realize that the global market for cars in the immediate post-war period was far, far smaller than it is today.

In 1955, the year Kaiser finally folded up shop, 8.5 million vehicles were sold in the U.S., and likely no more than 10 or 11 million globally.

Last year, by comparison, the world bought 83 million new cars and light-duty trucks--or perhaps eight times as many.

To equal the scale of Kaiser's achievement, Tesla must make and sell not just 750,000 electric cars, but roughly 6 million.

That's far from impossible--but it gives some notion of the challenge facing any automotive entrepreneur.

Cameras to construction to ships

Henry J. Kaiser, who got his business start at age 20 running a camera shop in Lake Placid, New York, became one of the most notable industrialists of the 20th century.

Kaiser Manhattan - front

Kaiser Manhattan - front

He moved to the West Coast in 1906, and founded in quick succession a construction company and a paving company. By 1931, his company was a prime contractor on the huge Hoover Dam project.

While Kaiser had never built ships before, he set up shipyards in Washington state and California, using the mass-production technique of welding rather than riveting for faster assembly.

Kaiser's shipyard in Oakland, California, became famous during World War II for its Liberty ships, built in just 45 days--with one ship built in a record-breaking time of less than five days.

The health and medical system set up during the war at the Oakland shipyard lives on today as the Kaiser Permanente system familiar to millions of Californians.

Starved for cars

As the war began to wind down, Kaiser saw opportunity in the automobile industry. The U.S. was starved for new cars, because production of 1942 models had been shut down shortly after the Pearl Harbor attack of December 1941.

He partnered with Joseph Frazer, president of automaker Graham-Paige, to found Kaiser-Frazer in 1945. In their first year on the market, 1947, the Kaiser and Frazer brands together sold a breathtaking 139,000 cars.

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