In 1886, Tesla formed his own company, Tesla Electric Light & Manufacturing. The initial financial investors disagreed with Tesla about his plan for an alternating current motor and eventually fired him, forcing him to work as a ditch digger for $2 per day. Tesla considered the winter of 1886/1887 as a time of "terrible headaches and bitter tears". During this time, he questioned the value of his education.
In 1887, Tesla constructed a brushless alternating current induction motor, which he demonstrated to the American Institute of Electrical Engineers (now IEEE) in 1888. In the same year, he developed the principles of his Tesla coil, and began working with George Westinghouse at Westinghouse Electric & Manufacturing Company's Pittsburgh labs. Westinghouse listened to his ideas for polyphase systems, which would allow transmission of alternating current electricity over long distances.
In April 1887, Tesla began investigating what would later be called X-rays using his own single terminal vacuum tubes(similar to his patent #514,170). This device differed from other early X-ray tubes in that it had no target electrode. The modern term for the phenomenon produced by this device is bremsstrahlung (orbraking radiation). It is now known that this device operated by emitting electrons from the single electrode through a combination of field electron emission and thermionic emission. Once liberated, electrons are strongly repelled by the strong electric field near the electrode during negative voltage peaks from the oscillating high voltage output of the Tesla Coil, generating X-rays as they collide with the glass envelope. He also used Geissler tubes. By 1892, Tesla became aware of the skin damage that Wilhelm Röntgen later identified as an effect of X-rays.
In his early research, Tesla devised several experimental setups to produce X-rays. Tesla held that, with his circuits, the "instrument will [... enable one to] generate Roentgen rays of much greater power than obtainable with ordinary apparatus".
He also commented on the hazards of working with his circuit and single-node X-ray-producing devices. Of his many notes in the early investigation of this phenomenon, he attributed the skin damage to various causes. He believed early on that damage to the skin was not caused by the Roentgen rays, but the ozone generated in contact with the skin, and to a lesser extent, nitrous acid. Tesla incorrectly believed that X-rays were longitudinal waves, such as those produced in waves in plasma. These plasma waves can occur in the force-free magnetic fields. His hypotheses and experiments were confirmed by others.
Tesla continued research in this field, performing several experiments prior to Roentgen's discovery. He photographed the bones of his hand and sent these images to Roentgen, but did not make his findings widely known. Much of his research was lost in the 5th Avenue laboratory fire of March 1895.