Tesla Founder sues Tesla Motors and its CEO

Martin Eberhard, Tesla Motors founder, has filed a suit against current Tesla Motors CEO Elon Musk and the company for libel, slander, and breach of contract, as well as several other reasons.

Eberhard co-founded Tesla Motorswith Mark Tarpenning and was ousted from the company in 2007 by Elon Musk. Since that time, Eberhard claims Musk has defamed him, attempted to take credit for the idea and founding of Tesla Motors, and held back Eberhard’s severance pay and stock options after he agreed to leave the company.

In addition to tarnishing Eberhard’s reputation and assuming control of the company he founded, Musk is said to have withheld Eberhard’s own personal Roadster. Eberhard paid for and was to receive the second-production Roadster, part of the Founder’s Series Production. Musk instead gave the second Roadster to one of his personal friends, made Eberhard wait two years to receive his car, and ran it into the back of a truck before giving it to Eberhard, according to the suit.

Elon Musk came into the Tesla Motors equation after Eberhard sought out funding. Musk was one of the first to give the startup company money, and subsequently joined the board of directors. Since then, Musk has assumed control of the company and become CEO.

After putting up with Musk’s alleged abuses for nearly two years, Eberhard is finally trying to get back at Tesla’s CEO and the company he tarnished. The only real question is: Why did it take so long?

Source: San Mateo County Superior Court

Update – Here’s Tesla’s official statement about the case:

“This lawsuit is an unfair personal attack and, more importantly, paints an inaccurate picture of Tesla’s history. This lawsuit is a fictionalized account of Tesla’s early years — it’s twisted and wrong, and we welcome the opportunity to set the record straight. As the media have already covered exhaustively, Tesla’s full board of directors unanimously fired Martin shortly after discovering that the cost of the car was more than twice what Martin portrayed it to be at the time. Incidentally, Tesla will likely be filing counterclaims and in the process present an accurate account of the company’s history. And it goes without saying that it will not have any effect on Tesla’s considerable momentum or business strategy going forward.”