ABSORBING BARRIERS. Fortune does a business history of Tesla Motors. The story vindicates the Hotelling principle of exhaustible resources in that a backstop technology requires a permanently higher price for the resource being exhausted.

That the Tesla exists at all is a small miracle. For car geeks it has long seemed that electric vehicles are the car of the future - and always will be. First tinkered with in the 1800s, the electric vehicle (or EV) had its fate sealed with the invention by 1900 of the internal-combustion engine, which was cheaper and could travel much farther than any battery-powered model. There was another flurry of EV development during the energy crisis of the 1970s, and again in the early '90s because of a series of regulatory guidelines governing emissions. But by the late '90s, California had defanged the electric-vehicle portion of its zero-emissions mandate and soon after, GM (GM, Fortune 500), Toyota (TM), Honda (HMC), and Ford (F, Fortune 500) all shut down their EV programs. The most dramatic end would come for GM's EV1, when the Detroit automaker famously ripped the cars away from ecstatic owners and sent them to the crusher, as detailed in the film Who Killed the Electric Car?

That backdrop makes the story of the Tesla all the more remarkable. The car was conceived by Eberhard, an engineer, serial entrepreneur, and inventor (his name is on battery-cooling, electric motor, and power electronics patents filed by Tesla Motors). He was convinced that if he could outfit an existing sports car chassis with loads of laptop batteries, it would be feasible to build and he'd find plenty of buyers among the speed-loving, planet-conscious Silicon Valley set and beyond. But given that he had zero experience in the auto world and that gas was at a relatively cheap $1.50 a gallon, Eberhard, 48, couldn't find a VC firm willing to give him enough to build the car.

That $1.50 a gallon in the late '90s is not relatively cheap, in constant dollars that is all-time cheap. Although the prototype cars of the 1970s might have gone to the junker, the research notes did not go to the memory hole. Permanently higher gasoline prices, however, are a precondition to commercial development of electric vehicles.

Sometimes, it helps to offer a product that appeals to early adopters despite higher first cost and higher operating cost.

Driving the streets of Palo Alto that year, [project engineer Martin Eberhard] began to notice that the same driveways that held a Prius (or "dork mobile," as he liked to call it) often also had a Porsche 911 or other luxury sports car.

"It was clear that people weren't buying a Prius to save money on gas - gas was selling close to inflation-adjusted all-time lows," says Eberhard, a tall, thin man with a mop of graying hair and a nervous, foot-tapping energy. "They were buying them to make a statement about the environment." So why not, he reasoned, allow this deep-pocketed clientele to make that statement driving a car that exceeded the performance of a Porsche?

I'll leave it to others to work out the sociology of inner-dork meets inner-reptile. The article goes on to study the engineering problems, one of the most serious being the heat given off by discharging batteries. That's the one surprise of my battery-assisted reel mower (that's my inner show-off showing). If I do use the battery extensively, the battery pack gets hot and it takes about two hours for it to return to ambient temperatures after use. The manual advises me not to recharge the battery pack while it is warm to the touch.

A memo to hybrid and electric car designers: build a power train that will handle a small trailer. I looked at the Priuses in 2002, while gas was still relatively cheap, but opted not to buy one when the dealer was adamant about any evidence of a trailer hitch voiding the warranty. (Apparently at least one sailboat owner he was aware of took that risk.)