Elon Musk Wanted to Be Tesla’s Co-Founder so Badly That It Took a Lawsuit to Make It Legal on Paper

When someone says “Tesla,” they can’t fault you if the first image that comes to mind is Elon Musk rather than one of the company’s cars. After all, Musk is the company’s face, given his ubiquitous status in the headlines. You can even be forgiven for thinking that Tesla is a company he founded. After all, there are plenty of public mentions of him being a company co-founder. However, you’d be mistaken. Elon Musk wanted to be known as a co-founder so badly that it took a lawsuit with the real founders for him to be listed as one!

Who founded Tesla?

Elon Musk at Tesla Motors launch of the Tesla Roadster in Los Angeles, California
Elon Musk at Tesla Motors launch | Vince Bucci/Getty Images

Tesla, Inc. (Tesla Motors back then) was originally founded by Martin Eberhard and Marc Tarpenning in 2003. According to Meaww, Eberhard had been looking to buy a sports car with high mileage, but given both global warming and Middle Eastern conflicts over oil, he felt conflicted about buying one. He and Tarpenning had previously partnered on a handheld digital reader and decided to join forces again to create electric cars.

Both men financed the company for the first year and then sought financing. They met Elon Musk, then known as a co-founder of PayPal and founder of SpaceX. Musk led a Series A financing round by investing $6.5 million. In early press accounts, Eberhard was referred to as “Mr. Tesla” and Musk as an “early investor,” which did not sit well with Musk in early press accounts.

Eberhard, Tarpenning, and Musk had a release date of 2006 in mind for their signature car, the Tesla Roadster. However, they did not get it to market until 2008. Musk had many suggestions for the car’s design throughout the production period, which impeded the workflow. Conflicts between the three came to a head during this period.

Musk’s lawsuit with Tesla’s founders

With his investment, Elon Musk had become Chairman of the Board, but by 2007, as per media reports, Eberhard was pushed out and subsequently sued the company. A settlement was reached, and due to a non-disclosure agreement, Eberhard cannot directly comment on the full circumstances behind his ousting. 

At this point, Musk took Tesla’s reins as its CEO. Tarpenning left the company in 2008 to spend more time with his family. Around this time, Musk had publicly started calling himself the company’s founder. In 2009, Eberhard filed a lawsuit against Musk for slander and libel. As per NBC Bay Area, the lawsuit was settled, and as a condition of the settlement, Musk and two other Tesla executives, JB Straubel and Ian Wright, are now allowed to call themselves co-founders, in addition to Eberhard and Tarpenning. 

Despite the settlement, Fast Company notes Eberhard and Musk have continued to air their grievances, and a personal dislike for each other, in print and on Twitter. However, as per CNBC, Tarpenning and Musk maintain a working relationship. Additionally, Musk, who owns 20 percent of Tesla’s shares, remains its CEO and is very hands-on with the company.

Elon Musk: co-founder of PayPal?

Elon Musk’s efforts to rewrite history may seem bizarre to some. True, he did believe in the company’s vision and provided Tesla with a significant sum of money in the early days when needed. Additionally, much of his input did wind up in the final Roadster when it launched.

However, that does not make him a founder. Furthermore, Tesla is not the first company to which Musk dubiously claimed founder status. His claim as a co-founder of PayPal is also questionable at best.

Forbes notes that a digital payments company called Confinity launched in 1998. Musk co-founded a similar company called x.com. The two companies merged, and Musk was named CEO in April 2000. However, he was fired from the role by October of that year. The following summer, the company was rebranded as PayPal. Musk had no role in the company at that point though he had lots of stock. Still, he presented himself and became known as a co-founder of PayPal nonetheless.

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