Electrics were again dead, as car-makers had declared twice before: once in the 1970s, after opec's oil squeeze eased, dooming a few halfhearted E.V. efforts, and a century ago, when E.V.'s lost to gas cars in the first place. In their stead this time emerged hybrids, with Toyota's Prius leading the way. Hybrids use gas for the energy drain of getting the car moving, batteries for cruising speeds: the most efficient applications for both energy sources, or so the new wisdom had it. But hybrids still get filled at the pump, and as a few critics began to observe, a world in which everyone drove a Prius would still be a world dependent—utterly—on foreign oil. Hybrids just delayed the reckoning.

Eberhard began looking for someone who saw the potential of lithium-ion-powered cars. What excited him almost more than the concept was the market opportunity. The big car-makers wanted little to do with electric vehicles. They didn't even want to look at new battery technologies, lest California slap another mandate on them. And no one else in the world wanted to start a car company: Preston Tucker in the 1940s and John DeLorean in the early 80s had shown how ruinous that could be. But lithium-ion batteries packed four times the energy density of lead-acid—a paradigm-changing improvement. And a lot had changed since Tucker and DeLorean. The more he thought about it, the more Eberhard sensed the time might be exactly right for starting a car company—an E.V.-car company at that. He just needed to find an investor with very deep pockets who saw that, too. To his delight, that someone found him.

One day, Elon Musk had lunch in L.A. with an impassioned young engineer named JB Straubel to gossip about new technologies. At his private company, SpaceX, in the industrial suburb of El Segundo, by the Los Angeles airport, Musk was building manned spaceships, to be test-launched from his own Pacific atoll.

But Straubel could top that: his friends at Alan Cocconi's shop had just put a lithium-ion pack into a T Zero with amazing results. Musk's eyes lit up. At Stanford, before he'd dropped out to join the Internet revolution, he'd intended to study the potential of high-energy-density capacitors. He wanted to see this car.

A month later, Cocconi brought his T Zero over to SpaceX. As soon as Musk climbed into it, he realized it was acutely uncomfortable, very likely a death trap, and hopelessly unmarketable. "I want to buy it," he said.

Cocconi shook his head. "It's not for sale," he said.

"Then put a lithium-ion pack in my car," Musk proposed. "I have a Porsche. You can take the guts out of it and make it an electric. I'd be willing to pay you up to a quarter-million dollars."

Cocconi had no interest in fancy cars like that. He wanted to electrify a Nissan economy car called the Scion. The Scion retailed for about $20,000. That was the way, he felt, to make electric vehicles mass-market as soon as possible.

Musk sighed when he heard the conversion would cost at least $45,000. "Who wants to take an ugly $20,000 car and buy it for $65,000? That's not a very viable strategy. I wouldn't want to drive it. My wife certainly wouldn't want to drive it." Better, said Musk, to put a lithium-ion battery pack into a high-priced, high-performance car such as a Porsche and make it even faster. That someone might buy.

"Maybe you ought to talk to this guy named Eberhard," Cocconi suggested. "He thinks the way you do."

Eberhard and his then 39-year-old partner from NuvoMedia, Marc Tarpenning, had formed a company in July 2003, for the car they hoped to make. Naming it was the easy part: Nikola Tesla, a hero to both men, was the tormented, Serb-born inventor who'd worked for, then fallen out with, Thomas Edison, going on to wage the "war of the currents" with his erstwhile mentor. Edison had pushed direct current, or D.C., for New York's first electrical grid; Tesla had championed alternating current, or A.C., and won the war because A.C. travels better than D.C. Among his 700 patents was one for an A.C. induction motor, now a standard component of any E.V. design. (Batteries generate D.C. electricity that gets chopped by the inverter into A.C. for the motor that turns the wheels.)