Elon Musk, a dreamer whose tenacity rivals even that of the late Steve Jobs, launched a global electric car revolution with his innovative fully electric vehicles.

Tesla Motors, the company he founded, tasted profits for the first time in a decade in the first quarter of this year. Not only that, but sales of the Model S alone in the US market surpassed those of venerable German auto giants Mercedes-Benz and BMW in the first half of this year.

Nearly overnight, Tesla stock shot to 10 times its value of three years ago. The symbolism is unmistakable, as the high-emissions petroleum automobile establishment has shifted direction towards green vehicles with low-carbon emissions, led by electric cars.

There was a time when Tesla could not live without Taiwan, when one-quarter of the company's parts and components were produced on the island. The heart of the electric car, its motor, was produced at the Tesla facility in the Linkou Industrial Zone in Taoyuan.

Unfortunately, it all came to an end four years ago. In order to qualify for US$465 million in funding from the United States government, Tesla had to raise the proportion of autonomously developed products in their cars. So they closed up operations in Taiwan at the end of 2009 and moved back to California.

William Chang, assistant to the president at Chroma ATE Inc., remembers that time well. "Tesla was one of our top customers, ranking around sixth or seventh," he relates.

Chroma ATE, an electronic equipment testing company with over NT$10 billion in annual sales, provided electronics control systems for Tesla's first electric model, the Roadster. The Tesla plant was located just 15 minutes by car from Chroma.

That facility has been closed and packed up, and Tesla's new Freemont, California plant is over 10,000 kilometers across the ocean from Taoyuan, leaving Chroma handling only after-sales service on the Roadster. Asked where Tesla now ranks among his company's customers, Chang hesitates for a moment before responding, "Maybe I'd better not say."

Like the plot of a local drama, Taiwan stood quietly by Tesla before it made it big, then Tesla left Taiwan high and dry for someone else.

Puppy Love

Gordon Chang, general manager of Fukuta Electric & Machinery Co., will never forget the day that Tesla Motors came knocking.

The chalet built especially for receiving guests next door to the company plant had just been completed in April of 2005. Three months later, in July, Tesla's chief technical officer, JB Straubel, approached.

"I never thought I'd end up in the automobile industry," says Chang, 54, with a grin and a gleam in his eyes.

Fukuta is located in the Shengang District of Taichung. Close by, the Dongshi forest area has been the site of countless small motor plants, and Gordon Chang spent time in the R&D department of a large one, Toshiba. In 1988 he and four brothers and sisters pooled together NT$5 million to found a business specializing in servo motors for such conventional industries as textiles and steel.

At the time of Straubel's visit, Fukuta Motor employed 80 people and claimed annual turnover of under NT$500 million. Ironically, Tesla was even smaller back then, with fewer than 60 employees.

Straubel had called upon suppliers across Europe, America, Japan and Korea before his visit to Taiwan, only to find rejection. Nor did Taiwan's major suppliers show any interest in his proposals, and the Ministry of Economic Affairs ended up thumbing through a directory of vendors before recommending they give Fukuta a call.

The two small firms were delighted to find each other, and Fukuta became Tesla's first supplier in Taiwan, producing the Roadster's motor.

Hot and Heavy

Tesla Motors was born in Silicon Valley. Familiar with Taiwan's information technology industry, the company's founding core treated automobiles like computers, dividing them up into parts and components and outsourcing their supply.

A considerable number of orders fell into Taiwanese hands, so that during the peak period around one-quarter of all Tesla parts and components were supplied by Taiwan. If some day electric cars spread in popularity to become the global standard, then Taiwan's contribution will stand as helping Tesla take technology from the laboratory to the production line.

"We made a lot of suggestions to get Tesla's designs into full production," relates I-Shih Tseng, president for Integrated System Solutions BU at Chroma ATE. The Roadster's electronic control system underwent over 20 revisions over the course of three years of adjustments.

Gordon Chang adds that electric vehicles' motors must be light, small, robust, and efficient. Fukuta worked with Tesla to replace aluminum with copper to produce the motor's core rotor, resulting in 40 percent higher electrical conductivity. Further refinements in materials and production processes reduced the motor's weight by an astounding 80 percent.

Nevertheless, the process through which Tesla produced a marketable electrical car planted the seeds for the eventual breakup.

The Romance Sours

Major suppliers had sound rationale for not taking orders from Tesla, as the nascent automaker required only low volume yet sought cheap prices, forcing many suppliers to lose money on their business.

One such company was BizLink International Corp., which makes battery connectors for Tesla.

BizLink has ridden the rise of electric vehicles to stratospheric stock prices, climbing from NT$58 in late June to over 100 by the close of July. However, BizLink general managerSam Tsai relates that his company had never made a profit with Tesla prior to the Model S reaching full production last year.

If the battery unit is the electric car's lungs, connectors are the capillaries, demanding high conductivity, low impedance, and heat resistance.

BizLink dealt with Tesla as far back as 2006, when a typical month produced less than US$20,000 in orders and sometimes nothing at all, so that BizLink was making nothing back on its equipment investments.

Development of electric vehicle products is a component of BizLink's diversified operational strategy, mitigating losses with profits generated from connectors used in the IT industry. BizLink also received orders from US-based electric carmaker Coda and battery maker A123, which subsequently filed for bankruptcy and bankruptcy protection, respectively.

The first electric vehicle firm to help BizLink turn a profit, Tesla is projected to deliver US$12 million in sales volume for the company this year.

This makes BizLink one of the lucky few among Tesla's long-term suppliers.

The Breakup

In 2009 the US government issued an ultimatum to Tesla Motors: if you wish to receive lucrative subsidies, then move your production back home and create job opportunities. This put the final nail in the coffin of Tesla's relationship with Taiwan. The company closed its Guishan facility, and the supply chain was unceremoniously broken.

Taiwan's government has come under heavy criticism for not trying hard enough to change Tesla's mind. Taiwan's inability to offer subsidies or to propose a comprehensive plan for electric car battery specs and recharging has been harshly cited as the chief reason that Tesla packed up and abandoned Taiwan.

However, Azizi Tucker, former senior supplier quality engineer for Tesla's Asia Supplier Development, believes that Tesla's return home should have been expected.

Conventional automobile companies handle most of the production in-house so as to ensure quality. Moreover, electric vehicles, being products under development, require zero gaps between R&D and production, so that design adjustments can be made immediately. As soon as the company founder stopped thinking like a scion of Silicon Valley and started thinking like the head of a car maker, Taiwan fell out of favor.

Among Taiwanese suppliers, only Hota Industrial, which produces brake cams, began working with Tesla starting with the Model S. This year the company projects sales of NT$189 million.

Motors rotate many times faster than engines, so that the transmission is needed to help with braking. Charles Chen, general manager of Hota Industrial, relates that in order to reduce cost Tesla bypassed major European supplier BorgWarner and went directly to Hota with orders.

"Automakers don't just frivolously switch suppliers; these orders will keep going for two or three years," notes Chen confidently.

Too Big for Taiwan?

Hsi-Lien Lu,general manager of Tesla Motors Taiwan, once asserted that Taiwan is a key link in Tesla's global electric car network, and that they could be expected to introduce electric cars in Taiwan at any time. Clearly, such a scenario has failed to materialize.

Familiarity with Tesla's electric car development strategy can soothe disappointment.

Tesla founder Elon Musk was set on selling an affordable electric car to the masses from the start. The high price tag of the Roadster and Model S cars was the result of technology that was not quite ready yet.

As products matured, Musk had to look for cheaper suppliers. Taiwanese vendors involved only in OEM and not on top of critical technology are highly at risk of being replaced. And the small scale production of smaller vendors is a further issue.

BizLink projects that production is sufficient to provide connectors to 200,000 electric cars. Jianhua Deng, group general manager of Bizlink Holding, Inc., says that upon reaching that juncture, Tesla is sure to look for a second supplier, possibly Yazaki, a major Japanese manufacturer of battery connectors. When that happens, it is not beyond the realm of possibility that Yazaki takes BizLink's orders with it.

Fukuta's Gordon Chang, meanwhile, has gone ahead and invested nearly NT$100 million on a 365 square meter production and R&D center in the Fongjhou Technology Science-based Industrial Park just two kilometers from his company's headquarters, in preparation for taking orders on Tesla's upcoming Model X electric car. "You gotta do what you gotta do. Don't act, and you miss opportunities," he nods cheerfully.

Translated from the Chinese by David Toman