How The Mercedes CLS Helped Give Birth To The Tesla Model S (Which Could’ve Been A Ford Fusion)

This week, Thomas wrote a fine obituary for the likely soon-to-depart Mercedes-Benz CLS, a car he says helped change the way we look at sedans forever. I think it did, too. With its sleek silhouette, the CLS hit reset on the four-door business and introduced the “coupe” language to all sorts of modern cars—including SUVs. Years from now, it’s due to be remembered as more of a pivotal moment in design than it’s given credit for at the moment.

But there’s another major way the CLS contributed to the auto industry that people tend to forget: a CLS became essentially the first-ever Tesla Model S mule, and it indirectly set the pattern for that car that would propel Tesla to what it is today.

I rediscovered this fact by re-reading Wall Street Journal reporter Tim Higgins’ book Power Play: Tesla, Elon Musk, and the Bet of the Century as research for a project I’m working on this summer. Published in 2021, Higgins’ book recounts the against-all-odds rise of Tesla from the tiny startup that stuffed laptop batteries into the Lotus Elise to the world’s current leader in electric cars. It’s an excellent read, not just for fans of Tesla and Elon Musk but anyone who’s interested in how the automotive industry works (which I suspect is a good many of you reading this.)

I started writing about Tesla in 2012 when Matt hired me as a staff writer at Jalopnik, so I missed out on some of the company’s earliest years—the ones marked with deep skepticism over the Roadster’s viability, the ouster of original founder Martin Eberhard and Tesla’s own near-collapse amid the Great Recession. (Fun times.) Even if you’re a dyed-in-the-wool Musk critic—and he’s done plenty to deserve it—the company’s growth story really is an incredible one.

The Model S is where Tesla proved it could make EVs in a serious way. The modern company’s story really begins with that car. All of Tesla’s original founders went into the venture wanting to build an electric sports car that was also sexy and fast, but they always had designs on following it up with a mainstream sedan offering, codenamed WhiteStar. It would appeal to more than just the limited niche of sports car buyers and at a time when four-door sedans were the kings of the market; everyone at the company knew that was where they couldn’t screw things up.

So even as Roadster was plagued with production problems, constantly delayed and subjected to price increases—sound familiar?—the company was hyping up the Model S and taking deposits to fund it.

Power Play notes that Tesla’s founding team built and developed the Roadster in California, but by 2007 had a separate team in Detroit working on the sedan project. Tesla poached some Big Three automaker and supplier veterans for this effort, but that physical distance and difference in philosophies with the Silicon Valley startup crew led to an immediate clash of cultures and goals. Musk even tried to fire them all at one point, though Eberhard ignored his orders.

The Detroit team, being auto industry operators, inked a deal with Ford to base the Tesla sedan on Fusion parts. They thought the Fusion was a really good car, and more importantly, this way they could get readily available parts on the cheap and get in good with suppliers who were wary of dealing with a Silicon Valley startup. In the book, this is likened to “taking apart a Lego car and configuring the pieces to their own imagination.”

That was an image that Musk didn’t like. By then, the team had seen and experienced the weaknesses with building the Roadster around a Lotus body and parts, which continually needed to be replaced to suit their needs. Increasingly, Musk and others felt it needed to be a ground-up effort, as hard as that is to do in this business.

Needless to say, the Tesla Model S did not end up being made from Ford Fusion parts. But by 2008, the Detroit team’s work on the sedan was stalling; the book says they were fighting over what size the sedan was supposed to be.

Back in California, J. B. Straubel, an early Tesla executive and someone who would prove key to battery development and a host of other things later, wanted them to “just build the damn thing.”

So, according to Power Play, he set about making his own Model S concept of sorts. He liked the Mercedes CLS and decided it was about the right size for what they wanted to make, and plus, it had the luxury chops they wanted. (The Ford Fusion, I am sorry to say, probably did not.)

Here’s an excerpt from the book describing what happened next:

Straubel got one, hacked out the engine and gas tank, and began converting it into an all-electric prototype, just has he had done several times before. But this time was different. This was a real luxury car. His team preserved all the Mercedes refinements, working carefully to keep the interior intact.

When they were done, the drive impressed even Straubel. The Roadster was still raw; the new electric prototype was magic. It was a massive sedan yet had the punch of a sports car.

All of which sounds like a lot like a Model S, doesn’t it?

The book says that Musk too was blown away when he drove Straubel’s creation and that both men felt they were onto something that would “change the world” if they could turn the concept behind that hacked-up CLS into an actual product.

The Mercedes-Tesla connection goes even deeper from there. The book says that the early Model S “show car” that was used for demonstrations—mostly to drum up excitement, deposits and more investor money—was also another Mercedes-based mule.

Interestingly, this is where they debuted some features that would come to define the modern EV industry, like placing the battery pack into the floor and replacing most buttons with a “video screen.”

Even more interesting is the fact that a little later on, Daimler and Tesla inked a partnership where the German giant would take a 9% investment stake in the scrappy startup. In exchange, Tesla would make electric Smart Fortwo batteries.

This partnership proved crucial for Tesla. Strapped for cash as it would be for a long time afterward, Damiler’s money kept Tesla afloat at a crucial time—and it got a badly needed stamp of legitimacy from one of the industry’s biggest players. The same would happen with a Toyota investment later.

But during that process, Power Play notes Mercedes offered to let Tesla hand Model S development over to them. Tesla was too small and didn’t have the chops yet to make a luxury sedan, the Germans argued, and this would give them access to the E-Class platform that their mule was using anyway.

Musk apparently considered the deal; it was in line with Eberhard’s original thesis for Tesla, which is why it’s similar to the Lotus deal. But it was Peter Rawlinson, another auto industry veteran but one with an independent streak of his own, who made the call to go it alone. (Rawlinson, who of course would later head up Lucid Motors, apparently sat on the floor with a bunch of Daimler engineers explaining why their parts wouldn’t work for Tesla for hours before the Germans threw in the towel.)

In the end, the Model S was indeed a fully ground-up effort. For a few years in the auto industry, a few observers thought Mercedes might buy Tesla outright; that was obviously not meant to be. But the Daimler partnership was a fruitful one, although it missed out on many billions of dollars by exiting that deal in 2014 before Tesla’s valuation exploded to the insane levels it’s at now.

Either way, the CLS did help give the auto industry one of its most game-changing products ever: the car that proved Tesla could do more than just the Roadster and, I would argue, that car whose speed and good looks permanently changed the world’s perception of EVs.

One common version of the Tesla story today is that the company’s success was an up-and-to-the-right arc from day zero, and that it dominated the EV race and reset the industry because Musk is a genius and everybody else is stupid. The truth is that the company’s story is a lot more fraught, and often fragile, than we remember today. The Model S would go through its own production problems and then the Model 3 made those look like a Sunday picnic. And over the years, as we see with Musk now, many of those wounds have been self-inflicted. Tesla may be famous for its Master Plans, but it’s equally notable for making it up as it went along. It worked more often than it didn’t.

Today, objectively, it is hard to see the Model S as anything but a game-changer in the car auto industry, especially with the coming EV boom from almost every automaker. And the earliest rough draft for the Model S as a viable product can be traced back to J.B. Straubel’s hacked-up Mercedes CLS. While it may be just a footnote in Tesla’s story, it’s still an interesting one. The CLS experiment showed them what was possible.

As the CLS departs, we can at least tip our caps for that reason, as well as its influential design.

Be sure to check out Power Play, it’s a good read.

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