Tesla co-founder Martin Eberhard is suing CEO Elon Musk, citing allegations of slander, libel and breach of contract. Eberhard’s lawsuit, which is 22-pages long, was filed on May 26 in San Mateo County, Calif. Superior Court and seeks unspecified damages.
The suit surrounds Musk’s treatment of Eberhard as well as the CEO’s handling of Tesla, alleging that Musk “compromised Tesla Motors’ financial health.” Eberhard says that Musk began a smear campaign against Eberhard on media outlets, attaching pages of news articles where Musk made negative comments about Eberhard. Eberhard says Musk essentially pushed him out of the company that he founded and consequently took full credit for developing the first electric car the company produced, the Roadster.
Eberhard also claims that Musk not only falsely said that he was the founder of the company, but has also misrepresented his past roles, including the extent of his involvement with the company he founded, PayPal. The suit also says that Tesla didn’t pay him severance or issue stock options, which was part of his contract upon his separation from the company in November of 2007. Some of the accusations border on hilarity, with Eberhard accusing Tesla of destroying his customized Roadster before the car was given to him.
The lawsuit is embedded below.According to Wired’s report, Tesla calls the suit a “fictionalized account of Tesla’s early years.” Tesla has also said that they plan to counter sure Eberhard. While some of the suit seems like sour grapes, the breach of contract accusations take on a more serious tone. It’s unclear how much Eberhard is seeking in damages.
Daimler recently took a 10% (or $50 million) stake in Tesla, putting the company’s valuation at $500 million. You can see our full coverage of Tesla and Elon Musk here.
And they say only black people have drama. LOL
p.s – I am not black
WTF?
Looks like YouTube commenters are wandering over to TC…
Drama has no color or status boundaries…
Time for TC to implement an approval process.
Yep… but then it’d show less traffic… So is it quality or quantity you like?
Why suing so late? Waited to see how Tesla is doing (now that Daimler took a piece of the pie)?
I wonder how often this comes up – the “official” history of a company is very often romanticized, and it’s hard to know what’s really happened behind closed doors without having inside knowledge. It’ll be really interesting to see how this turns out.
My father used to say partners usually don’t get along when:
1- They is no more money. It’s always the other partner’s fault
2- When there is a lot of money. There is always a partner feeling he deserves more than the other one.
Greed is the mother of failure guys…
The petroleum vehicle lobby bribing one of them to trouble the other? Is that a possibility in this case?
Given that some lobbyists might see this as a chance to prevent people from investing in electric/hybrid vehicles. Or reducing the initial “early-adopter” customers.
Whether manipulated or not, they are going to enjoy this news. Sucks.
Really makes me want one of their vehicles. Not.
Martin Eberhard is the FOUNDER of Tesla. Not simply the co-founder. Elon Musk was an early investor who took control of the company and then booted Eberhard out over engineering dissagreements. Many of the delays of the Roadster caused by changes such as the lower door sills were ideas of Musk’s.
The record needs to be set straight: Elon Musk did NOT co-found Tesla.
That’s right on. Martin and Marc approached Musk about investment. Musk brought the money and the celebrity status. I remember reading the early blog posts from Eberhard and you could see how much he loved that company.
Though I’m not 100% siding with Martin regarding his ouster (there were a ton of delays), Musk needs to be clear as to what role he played in the company.
The biggest lesson here: if you are a founder, don’t give 51% control to an investor. They can boot you out of your own company at any time (legally) and that’s what happened here (same thing happened to Steve Jobs).
Of course it’s easy to say that in hindsight. Eberhard shopped his idea for years, and then to FINALLY get an investor to come on board, but he demands 51%…it’s a tough decision. You could turn him down and maybe never see your company materialize. Or give him 51% and hope for the best.
Eberhard gave 51% and Elon put up the money. In that sense, yes Elon co-founded Tesla. Putting up your own money means he took much more of a risk than Eberhard. I would be pissed if it happened to me too but no matter how good or bad Elon is/was, that’s the risk Eberhard took giving an investor 51%. He needs to take responsibility for his decision.
Tesla being sued by it’s founder {seesmic_video:{”url_thumbnail”:{”value”:”http://t.seesmic.com/thumbnail/3GDm336DMX_th1.jpg”}”title”:{”value”:”Tesla being sued by it’s founder ”}”videoUri”:{”value”:”http://www.seesmic.com/video/CeEYBHTwnb”}}}
Often very common with tech start-up companies. You have a very scientist who doesn’t understand the principles of business. The company’s investors or board requires someone to grow the business to the next level and the founding scientist finds himself not in an all-controlling roll, throws a tantrum, storms out and sues. Never mind the fact that he’s rich and set for life.
I gather you are an MBA or a lawyer. The “principles” of business are intuitively obvious, there’s nothing to “understand”. Look at two scientists Brin and Page, and learn from them.
I love it when people use Google as an example like this. If it’s so “intuitively obvious,” how come every startup doesn’t succeed like Google?
This is so typical and one of the reasons why founders or co-founders fear investors. Usually you have to get ready to be screwed especially if it is your first startup.
I read the first 50 pages. Fascinating.
Some highlights: when presented with his termination agreement, Eberhard says that he had virtually no time to consult with a lawyer, and he signed the 2 termination agreements.
Sorry, but that makes you either clueless or lying.
Another highlight: Musk has a contract with PayPal that clearly says that he is a founder and PayPal can’t say otherwise. Then Eberhard uses this argument on Tesla. That sounds like pure sour grapes.
Add to this the introduction of the complaint, where the genius describes his beautiful vision.
Ridicule.
“Some of the accusations border on hilarity”, bias anyone? but then i guess TC never made it a secret who they wanted to fellate.
Perhaps it’s time to have investigative reporter Sarah Lacey sit down for another giggle-fest…er, hard-hitting interview with Musk.
Where’s the journalism, TC?
Given your connections, can you help determine whether or not these accusations are true or false?
Yeah sure. Why asking the court when Techcrunch can solve the mystery.
Witnesses, facts, jury all are non-court entities.
Only the study, hearings and decision are the work of the court. In theory, TC could stand as a witness in the hearings.
there is a reason that for a while Sequoia Capital (Paypal’s principal investor) and Elon Musk was not on speaking terms.
he was even left out of the sequoia website as a founder of paypal for a while.
I love how Musk states these are “fictionalized account of Tesla’s early years.”
Yeah, because they have totally been around since before I can remember…. Gimme a break.
I am buying a Fisker. No drama and they will actually be physically available for purchase soon – and at a local dealer.
“Some of the accusations border on hilarity, with Eberhard accusing Tesla of destroying his customized Roadster before the car was given to him.”
How is this hilarious? How would the author feel if even her ordinary, off-the-lot car was tampered with prior to delivery? And this man has put his heart and soul into it.
Please – show some empathy instead of writing off the cuff.
“Some of the accusations border on hilarity”
I think you should retract or at least rephrase this. It’s not objective or helpful and reads like you’re taking sides.
Congratulations to Daimler that bought 10% in this messy managed company.
Confused? You will be after this episode of soap.
Anyone else think Elon Musk is a complete tool? That boy ain’t right . . .
Musk being a founder of PayPal is a complete fabrication, that TC seems to like to repeat like the rest of the media. The guy used his early success/cash-out from Zip2 to buy his way into PayPal when his own venture x.com couldn’t make it. What Musk is doing at Tesla sounds like more of the same, so on the face of things, I would believe Eberhard.
Hasn’t this story been covered to death already? I doubt we will find out much new from this lawsuit.
http://money.cn...rtune/index.htm
Its time to ditch the road. Lets mount ducted fan fly over national electric grid ? Dc to calfornia 56 minutes or less. cryogenic jet propolsion draw the current from national electric grid fly free from gasoline? question is will our govt. alow ? you dont need battery , no hydrocarbon. tou can generate solar energy in india . put intercontinental power grid fly dc to california?
that was tesla’s dream?