AC began its existence in 1904 when a engineer named John Weller and a butcher named John Portwine began producing three-wheeled commercial vehicles dubbed the Autocarrier. The Autocarrier consisted of a single cylinder, air-cooled motor and became a big success. This led to the formation of the company, Autocarriers, Ltd. Around 1907 the cargo area of the Autocarrier was replaced with a passenger seat. A four-wheeled version designed by Weller was introduced in 1913.
In 1919 Weller designed a six-cylinder engine when War efforts in France prevented the delivery of the French-built Fivet engines in quantities that were needed. Weller's engine was 1991-cc in size and made mostly of aluminum, making it very light. This engine would become the base engine for the AC Ace.
During the 1920's AC vehicles had legendary success at race tracks winning such races as the 1926 Monte Carlo Rally. The AC vehicles set records in speed trials, rallies, and reliability runs.
The company was able to stay in business during wars and the Depression by selling parts and producing a few cars.
In 1947, AC resumed production of automobiles. The same 2-liter engine built in 1919 was used for both their saloon and drophead variants. During this time AC also produced single-seater vehicles powered by a BSA motor for the British Ministry of Pensions.
John Tojeiro was commissioned to build a race car for AC. What he designed was a vehicle that resembled the Ferrari 166MM, consisting of a Bristol 2-liter, inline six-cylinder engine. The vehicle became known as the ACE and was the precursor for the Shelby Cobra.