The Real Story of How Elon Musk ‘Stole’ Tesla

Elon Musk is one of the most recognized entrepreneurs in the world today, widely credited as the mastermind behind Tesla’s success.

However, the origin story of Tesla is far from the neat narrative often told.

The real story involves a hostile startup takeover, legal battles, and a rewriting of history that has left many wondering how Musk managed to become the face of Tesla while sidelining its actual founders.

The Birth of Tesla: Before Musk

In the winter of 2003, Martin Eberhard and Marc Tarpenning had been working on the idea of launching an electric vehicle company.

During a trip to Disneyland with his wife, Tarpenning came up with the name Tesla and soon after, purchased the domain.

By July 1st, 2003, Tesla Motors was incorporated, with Eberhard serving as CEO and Tarpenning as CFO.

Despite their enthusiasm, there was a missing piece: technical expertise in automotive manufacturing.

Eberhard, a computer scientist and electrical engineer, had spent years working in tech, but transitioning to car production presented new challenges.

Tesla’s initial plan was to develop the technology for an electric vehicle while outsourcing manufacturing to a partner—eventually selecting Lotus as a potential collaborator.

Enter Elon Musk: The Investor Who Became Chairman

Tesla needed funding to move forward, and that’s where Musk came in.

By early 2004, he invested $6.

35 million into the company during its Series A funding round, instantly becoming Tesla’s largest shareholder.

As part of his investment, Musk secured a powerful position—Chairman of the Board.

Musk’s involvement wasn’t passive.

He played an influential role in Tesla’s vision and direction, particularly in the development of the Tesla Roadster.

However, he wasn’t a founder in the traditional sense—he neither conceived the idea nor incorporated the company.

Despite this, he would later claim the title of co-founder, a point of contention that would lead to legal disputes.

The Growing Rift: Musk vs. Eberhard

Tesla’s early days were chaotic.

Production of the Roadster faced numerous challenges, including delays and unexpected costs.

Musk, still serving as Chairman, became increasingly frustrated with the way Eberhard was running the company.

Emails from the time reveal Musk’s dissatisfaction with the press coverage of Tesla, particularly when Eberhard was portrayed as the company’s primary leader.

The conflict came to a head in August 2007.

In a controversial move, Tesla’s board met without Eberhard and decided to remove him as CEO.

The next day, they made it official, ousting him from the company entirely.

Eberhard later described this as a “rude” and unexpected dismissal, leaving him with no immediate employment opportunities and a restrictive intellectual property agreement that barred him from working elsewhere.

The Aftermath: Legal Battles and Musk’s Rise

Following his removal, Eberhard filed a lawsuit against Musk in 2009, alleging defamation, breach of contract, and wrongful dismissal.

He also sought to prevent Musk and others from calling themselves Tesla co-founders.

The case was ultimately settled out of court, with the agreement that Musk, along with three other early employees, could officially be recognized as co-founders.

Musk didn’t immediately take over as CEO after Eberhard’s departure.

Tesla went through two interim CEOs—Michael Marks and Ze’ev Drori—before Musk assumed the role in 2008.

Once in power, he restructured the company, secured further investment, and led Tesla to become the electric vehicle giant it is today.

Who Really Deserves the Title of ‘Founder’?

The question of who gets to be called a founder is complex.

Traditionally, founders are the individuals who conceive, incorporate, and establish the foundational structure of a company.

In Tesla’s case, that was Eberhard and Tarpenning.

However, investors who come in early and significantly shape the company’s direction—such as Musk—can also lay claim to a form of ‘founder’ status.

Musk’s defenders argue that without his vision and financial backing, Tesla would never have survived.

His aggressive leadership and strategic decision-making propelled Tesla into a global powerhouse.

Critics, however, see his takeover as a textbook example of how money and influence can overpower the original creators of an idea.

The Legacy of Tesla’s Early Days

Today, Tesla is synonymous with Musk.

His name is inextricably linked with the company, and few people outside of the startup community remember Eberhard and Tarpenning’s crucial roles.

Whether one views Musk’s involvement as a hostile takeover or a necessary intervention, there’s no denying that he rewrote Tesla’s history to position himself at the center of the narrative.

Eberhard, for his part, has moved on but remains vocal about Tesla’s origins.

He continues to remind the world that Tesla was not Musk’s brainchild but a project he and Tarpenning built from the ground up.

The truth, as always, lies somewhere in between.

Conclusion: The Power of Narrative in Business

Musk’s story with Tesla serves as a cautionary tale for startup founders.

It highlights the risks of bringing in powerful investors who, over time, can assume control of a company’s vision and leadership.

In the end, money often dictates history, and those with financial influence can reshape narratives to fit their legacy.

Whether Musk ‘stole’ Tesla or saved it depends on one’s perspective.

What is certain is that Tesla’s success today is built on the work of many individuals—some of whom have been forgotten in the official story.

And as long as Tesla continues to dominate the electric vehicle market, the debate over its true origins will persist.

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