SAN FRANCISCO -- Ousted Tesla Motors Chief Executive Martin Eberhard has a bone to pick with Elon Musk.
Eberhard, co-founder of Tesla, was dumped by the company in December after a series of run-ins with Musk, a 36-year-old Silicon Valley wunderkind who took over the electric-car startup in 2005. But the brains behind the ambitious startup has been relatively quiet about the experience ever since.
No more. In a wide-ranging interview with ClimateWire, Eberhard portrayed Musk -- the founder of PayPal, SolarCity and SpaceX, an aerospace startup -- as a controlling, ego-driven executive who kicked him to the curb to hog the limelight.
As Eberhard tells it, Musk timed the ouster to coincide with the introduction of Tesla's zero-emissions Roadster, a sleek, high-performance sports car priced at $100,000 that just went into production last month. Musk, chairman of Tesla'a board, wanted the credit for the Roadster, so he forced the co-founder out, Eberhard said.
"I left because I was invited to leave," Eberhard said from his home in San Mateo, Calif. "Elon Musk singlehandedly kicked me out."
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| Flush with money from electronic books, Martin Eberhard helped pioneer the electric car. Photo courtesy of Tesla Motors. |
The exit was swift. After Musk demoted him to "the decorative title chief of technology," Eberhard said he was told to pack up his office on the Friday before Tesla executives were scheduled to meet with the Motor Press Guild, a group of car magazines, to promote the Roadster.
Musk then became the face of Tesla, which had been Eberhard's role. Following the demotion, Musk moved to solidify his support on the board and assured Eberhard the directors would support the decision. So Eberhard left quietly, without a severance, and without pushing for a vote by the board.
"What was going on there was very clear: Elon didn't want my name associated any more with the company," he said.
The story offers a view into the roller coaster lives of high-tech entrepreneurs. Eberhard, an electrical engineer, co-founded two computer companies during the dot-com bubble in the 1990s and made some money. One of them was NuvoMedia, a company that invented a handheld electronic book and Web-based distribution system called Rocket eBook. The product allowed users to download books from an online bookstore.
After selling that company to Gemstar/TV Guide in 2000, just before the dot-com collapse, Eberhard and his partner, Marc Tarpenning, took their cash and went out looking for a new challenge. They started up Tesla.
But they weren't alone. Musk, according to Eberhard, had invested millions of his own money and felt he deserved more attention because he had attracted venture capital dollars from Google co-founders Sergey Brin and Larry Page, former eBay President Jeff Skoll and an equity fund managed by JPMorgan. In addition, Tesla under Musk had lined up celebrity orders from the likes of California Gov. Arnold Schwarzenegger (R) and sold out the 2008 model Roadster before the delivery of a single car.
In Musk's mind, according to what little he has said about it publicly, Eberhard had become expendable -- even though he was well-liked within the company. Eberhard admits he has hard feelings, mostly because of his belief in Tesla's mission and its success at reviving the electric car. He pointed to General Motor Corp.'s decision to ramp up production of its Chevy Volt, an electric plug-in, as evidence of Tesla's pioneering influence during his time as CEO.
"Five years ago, everyone thought electric cars were dead," he said. "Tesla reinstated the electric vehicle as a possibility. We accomplished that."
Eberhard still owns Tesla shares and said he is rooting for the pioneering outfit he started in 2003. But hard feelings linger for the executive who just last year was listed among the top 24 innovators by Fortune magazine. He admits it has become personal between him and Musk.
What puzzles Eberhard most is Musk's avoidance of the issue and unwillingness to find him a new role within a growing operation. Musk offered only vague explanations for the move, Eberhard said, and has avoided questions by the press.
"Elon has made about six different arguments about why I got kicked out," he said. "I put my heart and soul into that company. It was difficult for me; it still is."
Tesla and Musk did not return repeated calls and e-mails seeking comment.
Musk's power play, Eberhard said, started in August 2007 when he brought in Michael Marks, a former CEO of Flextronics, as Tesla's new CEO. Eberhard, an engineer, was named president of technology, a move he said made sense given Marks' experience with manufacturing.
Tesla at the time was plagued by design problems with the Roadster's transmission and had delayed production several times. So Marks was brought in to clear the decks, focus the engineers and ultimately shift what had been a development mindset into the manufacturing phase.
"Michael Marks is highly competent," Eberhard said. "Michael Marks was a home run."
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| In happier days, Martin Eberhard and Gov. Schwarzenegger look over a prototype Tesla roadster. Photo courtesy of Tesla Motors. |
But Marks and Eberhard -- who answered to the new CEO -- immediately clashed with Musk over importing components for the Roadster from Asia. Musk was intent on shifting the company's manufacturing base to California rather than buying components from factories in China, but Marks thought this position was unsound.
The clash, which Eberhard called "a train wreck," left the Internet icon disputing with the veteran manufacturer over a philosophical point that could ultimately threaten Tesla's bottom line. "Elon Musk never worked for a manufacturer," Eberhard said. "He didn't get it."
"Marks knows manufacturing; his experience with electronics is, you do most of your component manufacturing in Asia," Eberhard added. "But Elon has a very, very negative opinion of manufacturing overseas. He thinks you can build just as cheaply in the United States."
So Marks left, and was replaced by Ze'ev Drori, another Silicon Valley insider who had founded a semiconductor company. Eberhard says he is not sure where Musk intends to push the manufacturing base, but he fears closing out Asian suppliers will hurt the automaker's ability to compete. He also questions Musk's plan to manufacture and sell lithiom-ion battery packs made in the United States.
"That's not going to improve their cost margins any," he said.
Looking forward, Eberhard said he is looking for a niche in the clean-tech space and may launch a new startup when the time is right.
His interest is drawn to problems associated with energy storage, which he says will frame "the next energy crisis." Eberhard referred back to the problem of component manufacturing as a possible area of focus, particularly in batteries, but he thinks Asia is positioned to dominate this market.
Tesla, he said, cannot compete with lithium-ion batteries that are "cranked out" by automated Japanese firms that produce more than a million batteries a month. Labor is cheaper in China, as well, and given the high degree of automation in Japan, Eberhard said it takes only 30 employees or so to run a factory.
So why not pursue the same model in the United States? Simple answer: subcomponents.
"All the suppliers of subcomponents of batteries are in Asia, the whole infrastructure is in Asia," Eberhard said. "I don't know how to solve that problem."
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