Although Elon Musk is sometimes considered the founder of Tesla, historically his role at the automaker is much more complicated.
In fact, Martin Eberhard co-founded Tesla in 2003 with his longtime friend Marc Tarpenning. Musk led the company’s $7.5 million Series A funding round and became chairman of the board in 2004.
But Eberhard and Musk clashed fiercely and Musk removed Eberhard from the role of CEO in 2007. Musk said that Eberhard delayed production of Tesla’s first car, the Roadster, and that Eberhard was responsible. responsibility for other operational matters.
Musk officially took over as CEO of Tesla in 2008. He called Eberhard “the worst person” he has ever worked with. For his part, Eberhard sued Musk in 2009, accusing him of defamation. (The two later settled the lawsuit.)
The BI reporter had a conversation in December with Eberhard – who was once known as “Mr. Tesla” and now describes himself as a “retired businessman”. The Tesla co-founder discussed everything from the early days of his startup to the future of electric cars.
Eberhard said that seeing the Tesla of this moment, he thought there would be a million things he would have done differently, but most of them were minor regrets.
For example, he said Tesla spent too much time debating whether to sell its cars through dealers or directly to customers. Eberhard also said that although he will be making technical changes to the Roadster, overall he is proud of what the team has created.
“If you have hindsight, you can see all the mistakes you’ve made“, said Eberhard.But I think overall, we did the right thing. And the proof is that for the first time in decades, we have successfully built a car company a little bit”.
“If I could do it all over again, would I accept Musk’s investment?“, Eberhard questioned.There really wasn’t much money to choose from, you know“.
Eberhard said that if he stayed, he would have some other options than Musk.
“For example, I would strongly oppose the acquisition of SolarCity“, he said, calling it a “distraction” for Tesla.
Tesla acquired SolarCity, a solar energy company, in 2016 for $2.6 billion. Musk is under close scrutiny because the company is run by his cousin Lyndon Rive. Several Tesla shareholders have filed lawsuits alleging Musk pressured Tesla board members to buy SolarCity and bail the company out. However, Musk won the case last year. In 2021, Tesla’s energy storage and production segment generated nearly $3 billion in revenue.
Eberhard also said he would have a way to create a more positive culture at Tesla if he stayed at the company. “I believe in treating employees with respect and I don’t like random dismissals or such“, he said.If so, maybe the culture inside the company will be a little better“.
Eberhard seems to be alluding to reports suggesting that Musk can be a difficult person to work with, easy to act on when angry, and even angering employees. Musk has denied such allegations and said in 2021 that he had given employees “clear and candid” feedback.
Describing his own management style, Eberhard says: “I’ve tried to keep employees motivated by helping them fulfill their mission to realize that what we’re doing really matters to the world. And that’s driven people to spend a lot of time working hard – but not out of fear, but out of a sense of accomplishment and a sense of responsibility.”
“We also don’t lay off randomly“, he added.I also have to fire some people from time to time, but I hate it.
THE REAL PERSON OF ELON MUSK
Eberhard said that in recent years he has tried to avoid reading the news about Musk.
“Honestly, I blocked Elon Musk in my news feed“, he said.I don’t need to read more about him. I just had a hard time reading it. What happens will always be Musk will make some extravagant statement on Twitter and suddenly a bunch of reporters want to talk to me.“.
But Eberhard has said he has noticed a change: He describes Musk as more of an active participant in the company. “Elon is a different person now than he was then” said Eberhard. “Previously, he, like any other board member, attended board meetings, had no office at the company. He also doesn’t go there often. He doesn’t give directions to my staff, that sort of thing“. Now, Eberhard added, Musk is “a super active person“.
Tesla’s early history was a point of contention between Musk and Eberhard. In a tweet in November, Musk said he “was the head of product and directed the design of the original Roadster“. Eberhard protested.
Eberhard said that during his time as CEO and Musk as chairman of the board, Musk attended monthly board meetings but did not work at the company often. Eberhard said: “Because So, you know, the idea of him sitting around working on a car or something is simply not true. He’s not there“.
Eberhard said he realized the growing friction between himself and Musk as Tesla began to gain more media attention.
“His behavior changed dramatically as soon as the press started talking about Tesla“, said Eberhard.Musk gets mad if there’s anything written about Tesla that doesn’t prominently mention his name. And that’s when I realized there’s a huge ego here“.
Eberhard, who at the time was nicknamed “Mr. Tesla,” said that at any time not mentioned in an article about the company, Musk would call him and “scream” at him.
Musk toppled Eberhard in 2007 and became CEO shortly after. But that was not the end of their communication.
Eberhard filed a defamation lawsuit against Musk in 2009, after Musk began calling himself the founder of Tesla and making negative comments about Eberhard. The lawsuit was settled the same year for an undisclosed amount, provided that Musk and two other Tesla executives, JB Straubel and Ian Wright, could also claim the Tesla founder title. Musk and Eberhard also signed an agreement not to disparage each other.
Eberhard said that was the last time he spoke to Musk. He added that he sent Musk a congratulatory message in 2008 when Musk launched his first rocket into space but never received a reply.
Musk has occasionally tweeted about Eberhard. Eberhard speculated: “I guess it’s because he’s been trying for years to create the story that he’s the founder and now people know that’s not true. It’s a lingering frustration“, Eberhard said.
THE FUTURE OF EVENTS
Eberhard says that when he and Tarpenning founded Tesla in 2003, everyone knew it was “impossible” to make a profit by making electric cars. Tesla is the only startup to try, after established automakers like Ford have largely abandoned electric cars.
The International Energy Agency has estimated that 13% of cars sold globally in 2022 will be electric. “Basically, I see that we won” said Eberhard. “About the revolution we started – we succeeded“.
Eberhard says he has one piece of advice for startups and used carmakers getting into the EV industry:Don’t try to compete head-to-head with Tesla“.
He said: “Unlike a lot of companies In Silicon Valley, the auto industry isn’t one where there’s a total winner. There are different types of cars for different market segments“.
The Tesla co-founder said he’s frustrated with some companies, like Lucid. He said Lucid is trying to compete directly with the Model S with a similar electric sedan called the Lucid Air. Eberhard worked for Lucid when it was still known as Atieva in 2015 but disagreed with the company’s CEO and left after six weeks.
Eberhard says he’s more impressed with companies like Rivian. “Rivian looked outside the box and said: You know, the #1 best-selling vehicle in North America is the F-150 truck. So if we want to find a new market, it’s a lucrative place” said Eberhard.
While Tesla dominates the US electric vehicle market, Ford has taken the No. 2 spot. Ford sold just over 41,000 electric vehicles in the first three quarters of 2022, while Tesla sold more than 900,000 in the same period.
Eberhard says Tesla has been waiting for other companies to catch up, but he doesn’t see companies like Ford as a threat. Eberhard said: “The world has supported more than a dozen successful major car companies for generations. This won’t change“.
Tesla’s Autopilot and the Evolution of Automotive Technology
Eberhard may not think Tesla is being threatened by other automakers, but he says he sees a bigger threat coming from within the company: Self-driving technology.
“In my opinion, we need to get out of the habit of thinking about all these self-driving things connected to electric cars.“Eberhard said.”I want to see people think about making cars that people can drive“.
Musk has made self-driving technology a big part of Tesla’s future. Last year, he described the automaker’s self-driving software as the difference between Tesla being worth a lot of money or almost nothing. Musk has said that the company “more like a software company than a hardware company“. But Eberhard says it’s not that simple.
“I think it’s wrong to think of cars as a software platform – you know, like an iPhone or something. It’s not the same“.
“I have an iPhone and every time I get a software update there is a bug in it“, Eberhard added.These errors mean, for example, that my news feed app crashes from time to time. That’s not a big deal, as it’s just annoying on the iPhone. But that kind of bug shows up in the control software, like my brakes or the steering wheel, it can kill people.“.
Eberhard says that while he appreciates “safety-oriented systems” such as driver assistance features, he “not a big fan” of autonomous driving. He said that Musk seems to be preoccupied with self-driving cars, and that is Eberhard’s biggest concern for Tesla under Musk’s leadership.
“I think this technology is too immature to be deployed on the road,” he said, referring to Tesla’s Full Self-Driving beta software. In the past, Musk has said that some bugs are possible with beta software and has encouraged drivers to report problems with the software.
For years, Musk has promised that Tesla will soon have fully autonomous cars on the road. And while the automaker equips new Teslas with Autopilot and sells the Full Self-Driving Beta feature for $15,000 or $200 a month, the company is a long way from achieving that capability. fully autonomous driving. Their software requires licensed drivers to monitor the vehicle at all times.
The company is also facing scrutiny from several technology regulators. The National Highway Traffic Safety Administration is investigating Tesla’s Autopilot software and its Full Self-Driver add-on. Last month, Tesla unveiled a Justice Department investigation into its self-driving car claims. And the Securities and Exchange Commission is investigating whether Tesla made false statements about the software’s capabilities.
Eberhard says that when he was CEO of Tesla, no such thing as “autonomous driving” existed. “I don’t have the budget to make a decent car infotainment system let alone think of something like Autopilot“.
LIFE AFTER TESLA
It wasn’t easy after Eberhard left Tesla. He said he was “basically unemployed” for two years because of an intellectual property deal with Tesla. This situation left Eberhard almost out of money and unable to work until his contract expired.
“Exactly on the day my contract expired, Volkswagen hired me“, Eberhard said.
He joined VW in the fall of 2009 as director of EV development at the Electronics Research Laboratory. He left in 2011. Eberhard said that trying to make electric cars a reality at VW was “impossible”.
“I thought they got bored of me and I left“, he said.
Eberhard went on to work briefly with a number of other startups, including Lucid and SF Motors, and he launched two EV battery startups, Inevit and Tiveni.
Still, even with his swagger, Eberhard hasn’t strayed far from his Tesla roots. He said he still drives the Roadster every day, while his wife drives the Model S.
He said that in 2008 he bought the second Roadster ever made but stopped driving it about six or seven years ago, the car was custom painted with a decorative plaque that read “Mr. Tesla.” Now Eberhard drives a used Roadster.
Eberhard said he still maintains a “small stake” in Tesla. Although he did not elaborate, he asserted that he has held his shares longer than anyone. Eberhard owned less than 5% of Tesla when he left in 2007.
“I had a bigger stake, and I sold a lot of stock early on, which, you know, in hindsight might not have been the ideal thing to do, but it’s what I did.“, he said.
Today, Eberhard and Tarpenning work together in a small private investment firm. They meet for coffee every Wednesday – something they’ve been doing since 1988.
He said: “If one of us is away from home that week, we move the calendar to Tuesday or Thursday, or sometimes it turns into lunch. Even during the Covid epidemic, we even drank virtual coffee. It was at that coffee session that we dreamed of Nuvomedia and that’s where we dreamed of Tesla.“.