JB Straubel

Jeffrey “JB” Straubel is an American engineer, entrepreneur, and visionary, best known as a co-founder and the former Chief Technology Officer (CTO) of Tesla, Inc.. Often described as the quiet genius behind Tesla’s groundbreaking battery and powertrain technology, Straubel was instrumental in transforming the company from a niche startup into a global automotive leader. His deep expertise in electrical engineering and energy storage formed the technical backbone of the EVs that revolutionized the industry. After leaving Tesla in 2019, he founded Redwood Materials, a company focused on creating a sustainable circular economy for batteries by recycling and refining their core components. For investors, Straubel represents a critical, yet often overlooked, force in the clean energy transition. His career demonstrates the immense value created by deep technical knowledge and a relentless focus on solving fundamental engineering challenges, offering a powerful lesson in identifying companies with true, lasting technological moats.

While Elon Musk became the public face of Tesla, JB Straubel was the technical heart of the operation. His obsession with electric vehicles predates the company itself and is a classic tale of garage-tinkering genius.

A graduate of Stanford University with a master's degree in energy engineering, Straubel's passion was hands-on. Before Tesla, he famously built his own electric car by converting a junked 1984 Porsche 944, which went on to set a world record for electric vehicle racing. His expertise led him to a lunch meeting with Elon Musk in 2003. Musk was considering an investment in the fledgling Tesla Motors, and Straubel's technical due diligence—specifically his conviction that lithium-ion batteries could be safely and effectively harnessed for automotive use—was a key factor in convincing Musk to go all-in. As one of the first five employees and CTO, Straubel led the engineering for Tesla’s core technologies. He oversaw the development of the battery pack, motor, power electronics, and software systems for the Roadster, Model S, and beyond. His work was foundational to giving Tesla a multi-year technological lead over every legacy automaker.

Straubel is not a traditional value investor in the mold of Warren Buffett, but his approach to building businesses is a masterclass in creating long-term intrinsic value. His philosophy is rooted in engineering reality, not financial abstraction.

Straubel operates from a first principles perspective, a problem-solving method that involves breaking down complex issues into their most basic, fundamental truths. At Tesla, this meant ignoring how batteries were made and instead focusing on the physics and chemistry of how they could be made most efficiently. This approach led to breakthroughs in battery cost, density, and safety that competitors couldn't replicate. For investors, this is the ultimate lesson in identifying a moat. A strong brand is good, but a moat built on fundamental, hard-to-replicate technology and manufacturing excellence is far more durable. Straubel builds companies that win not by playing the existing game better, but by changing the laws of the game itself through innovation.

Straubel’s current venture, Redwood Materials, is the logical extension of his life’s work. He foresaw a monumental problem on the horizon: what happens to the millions of EV batteries at the end of their life? Redwood Materials is his answer. The company recycles end-of-life batteries and electronics, recovering valuable metals like lithium, cobalt, nickel, and copper, and then supplies those refined materials back to battery manufacturers. This creates a closed-loop system that is not only environmentally sound—a major plus for ESG investors—but also a brilliant strategic move. It reduces reliance on volatile global supply chains and creates a domestic source of critical materials, representing a massive, long-term growth opportunity.

Understanding JB Straubel's career and methods provides invaluable insights for any investor looking to capitalize on the technological transformations of the 21st century.

While you can't buy shares in the privately-held Redwood Materials (yet), you can apply Straubel's principles to your own investment strategy.

• Look for technical founders. Seek out companies led by individuals with a deep, almost obsessive, understanding of their product's core technology. These are the leaders who build lasting competitive advantages.
• Invest in the ecosystem. Straubel’s work defines the cutting edge of several key sectors. Consider investments in the broader themes of battery technology, advanced manufacturing, recycling infrastructure, and renewable energy.
• Value the 'how'. Don't just analyze a company's financial statements. Try to understand how it creates its product and what makes its process unique and defensible. True value is often hidden in the factory, not just the balance sheet.

Straubel’s journey from a garage tinkerer to the architect of two industry-defining companies serves as a powerful reminder: the greatest investment returns often come from backing visionary builders who are solving the world's hardest problems from the ground up.