Boardroom Coup

By the middle of 2007, the Roadster program was late and over budget, and the board -- with chairman Elon Musk driving the decision -- decided Martin Eberhard was not the person to fix it. In August 2007, Eberhard stepped down as CEO. Tesla announced in November that he would move into an advisory role, "President of Technology," a title with no clear operational authority; he left the company entirely two months later, in January 2008. Cofounder Marc Tarpenning departed the same month.

What followed was a scramble at the top: Michael Marks, a former Flextronics CEO, took over as an interim chief executive in August 2007, replaced within months by Ze'ev Drori that December. Neither stuck around long. In October 2008 -- the same month SpaceX's fourth Falcon 1 launch reached orbit and NASA's rescue contract was still weeks away -- Musk installed himself as Tesla's CEO outright, a role he has held ever since.

Eberhard did not go quietly. In June 2009, he sued Musk, alleging libel, slander, and breach of contract over how his departure had been characterized publicly. He withdrew the suit two months later, and in September 2009 Tesla confirmed a settlement without disclosing its terms. One outcome did become public, though: going forward, Tesla would recognize five people, not one, as company co-founders -- Eberhard, Tarpenning, Musk, and two other early engineers, Ian Wright and JB Straubel. It was a legal peace treaty over a word -- "founder" -- that would keep mattering to Tesla's public story for years afterward.