Tesla cofounder says he was 'basically unemployable' and out of money for 2 years after being ousted from the company

Martin Eberhard
Martin Eberhard cofounded Tesla in 2003 but left the company four years later.Chris Weeks via Getty
  • A Tesla cofounder said he was out of money and "basically unemployable" after he left the carmaker.

  • Martin Eberhard was ousted as CEO of Tesla by Elon Musk and left the company in 2007.

  • He went on to work at Volkswagen, as well as several electric-vehicle startups.

You might think one of the founders of Tesla, now one of the most valuable companies in the world, would have been in high demand when he was back on the job market, but Martin Eberhard told Insider he was unemployed and running low on money after he was pushed out as CEO in 2007.

"After I left Tesla, I was basically unemployable for about two years because of the intellectual-property agreement I had with Tesla and with Tesla being as litigious as they are," Eberhard told Insider. "So for the first couple of years, I was, first of all, out of money and, second of all, unemployed."


Eberhard and his longtime friend Marc Tarpenning came up with the idea for Tesla during one of their weekly catch-ups, but Eberhard's contract with Tesla meant the company owned the rights to the work he produced at the electric-car maker. It also prohibited him from working with another automotive company for two years.

"Pretty much on the day that time period expired, Volkswagen hired me," Eberhard said.

He joined VW in fall 2009.

The Tesla cofounder lost his role as CEO of Tesla about three years after Elon Musk began investing in the electric-car maker. Eberhard previously told Insider that Musk and Tesla's board had met behind his back and voted to replace him as CEO. Eberhard transitioned to the role of president of technology at Tesla but said he was moved off almost every responsibility, save for troubleshooting and a handful of peripheral issues.

He left the company in 2007. Since then, his involvement in Tesla's early history has become a point of contention between Eberhard and Musk.

Musk has said Eberhard's departure was related to delays in the Tesla Roadster's production, as well as other operational issues.

"It was not a question of personality differences, as the decision to have Martin transition to an advisory role was unanimous among the board," Musk said at the time. "Tesla has operational problems that need to be solved and if the board thought there was any way that Martin could be part of the solution, then he would still be an employee of the company."

Musk did not respond to multiple requests for comment. Insider's emails to Tesla's press line seeking comment were not returned.

Eberhard sued Musk in 2009, alleging Musk had defamed him. It was settled within the same year. Since then, Musk has called the cofounder the "worst person" he's ever worked with. Last year, the billionaire slammed Eberhard, saying he "could have risked his money, but was unwilling to do so," referring to a bet on Tesla. At the time, Eberhard called Musk's comment untrue in an email to Insider.

At Volkswagen, Eberhard served as the director of EV development at the carmaker's Electronics Research Laboratory until 2011. He called the experience "extremely educational" but said trying to make electric cars a priority was "a lot like pushing strings."

He went on to work briefly with other startups, including Lucid Motors, which was called Atieva at the time, and SF Motors. He also launched two EV-battery startups, Inevit and Tiveni.

Eberhard told Insider he still owned a "small stake" in Tesla (less than the 5% stake that requires an investor to file with the Securities and Exchange Commission) and rooted for the company's success.

Today, Eberhard calls himself a "retired entrepreneur" and "occasional visionary." He continues to meet with Tarpenning on a weekly basis to discuss ideas — a ritual the two men have kept for the better part of 35 years. The two entrepreneurs also run a small investment firm together.

Read the full Insider interview with Martin Eberhard.

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Read the original article on Business Insider