Green Tech

The Tesla Roadster

(Credit: Tesla Motors)

A San Mateo County Superior Court judge on Wednesday denied former Tesla Motors CEO Martin Eberhard's request that he be declared one of only two Tesla founders, according to a statement released by Tesla Motors late Wednesday night.

"We agree that Eberhard's claims on the question of who founded Tesla have no merit. We look forward to proving the facts in court as soon as possible and setting the historical record straight," Tesla's current CEO Elon Musk said in a statement.

The ruling is in keeping with Tesla's claim that the company was founded by a team of several people, including Musk, rather than just two men.

The court ruling and subsequent press release are just the latest volley in an ongoing public battle of words on the Internet and facts in the courtroom between Tesla and Eberhard.

Eberhard is suing Tesla and Musk for libel and breach of contract.

Tesla Motors Chairman and CEO Elon Musk

(Credit: Tesla Motors)

The legal battle and war of words between two Tesla Motors CEOs are heating up.

Current Tesla Motors CEO Elon Musk responded in a lengthy company blog on Monday to a lawsuit charging libel and breach of contract from former CEO Martin Eberhard. In his blog, Musk dismisses Eberhard's claim that Eberhard was responsible for many of Tesla's key achievements, one of the key points of the suit.

Among other comments, Musk writes: "The facts are that when I requested through AC Propulsion to meet Eberhard, he had no technology of his own, he did not have a prototype car and he owned no intellectual property relating to electric cars. All he had was a business plan to commercialize the AC Propulsion Tzero electric sports car concept. Three years later, when Eberhard was asked to leave Tesla, most of the work that he had been paid to do had to be redone."

The battle started when Eberhard filed suit again Musk and Tesla, alleging that Musk was trying to "rewrite history" by taking credit for key accomplishments behind Tesla Motors.

Electric car maker Tesla has been in legal waters before. Last November, the company lost a lawsuit against Fisker Automotive, alleging that Fisker had stolen trade secrets. Last July, former Public Relations Director David Vespremi filed a suit, which was dismissed, against Tesla saying the company violated his terms of employment.

In the wake of layoffs and canceled orders, Tesla has been busy trying to drum up cash to fund its development and manufacturing. The company has applied for a Department of Energy loan to finance construction of a factory.

Corrected at 2:15 p.m. PDT: This article initially misstated the status of Tesla's loan application to the Department of Energy. It has applied for a DOE loan but has not yet received it.

NEW YORK--"I'm anti-tax, but I'm pro-carbon tax," Tesla Motors founder Elon Musk said onstage at the Wired Business Conference here Monday--a remark that prompted interviewer and Wired editor-in-chief Chris Anderson to quip that he was a "true Silicon Valley libertarian."

Tesla Motors Chairman and CEO Elon Musk

(Credit: Tesla Motors)

Gasoline "should probably be $10" per gallon, said onetime PayPal co-founder Musk, who is also attempting to make sending satellites into space cheaper with a start-up called SpaceX. "I'm not paying for the true cost of gasoline at the pump...since nobody's explicitly paying for the CO2 capacity of the oceans and atmospheres, it's getting consumed. We will pay for it down the road, but we are sort of ignoring it for now."

Musk's company has put out the Tesla Roadster, a pricey sports car that runs exclusively on electric power. On the way is the Model S, a more affordable sedan. Separate from the technology, Tesla has gained a reputation for financial difficulties and corporate bickering. Earlier this month, former CEO Martin Eberhard sued Musk and the company for libel and breach of contract.

Musk's rash attitude and devotion to cutting-edge innovation has constructed him as a figure less than willing to compromise. He didn't sound too satisfied, for example, with the level of innovation in the Toyota Prius, the car that is practically synonymous with environmental consciousness in the auto industry.

"A Prius is not a true hybrid, really," he said. (A plug-in Prius is on the way.) "The current Prius is like, 2 percent electric. It's a gasoline car with slightly better mileage."

That said, Tesla shines quite a bit brighter due to the utter disarray of the U.S. auto industry, with major automakers falling into bankruptcy and Detroit in a continuing downward spiral. This, according to Musk, was the inevitable result of a completely broken system.

"Great companies are built on great products," he said, and when those products take a turn for the worse, so does the company. Automakers, Musk theorized, focused too much on the money rather than innovation. "The path to the CEO's office should not be through the CFO's office, and it should not be through the marketing department. It needs to be through engineering and design."

Musk said that unions weren't inherently the problem but the way that they were structured was. "It's not out of the question to have unions. But if they do have a union, they've got to understand that they're on the same side of the company," Musk said. "I really am kind of against having a two-class system where you've got the workers and the management sort of like the nobles and peasants." In other words, Musk thinks Detroit could use a dose of Silicon Valley corporate culture.

Surprisingly, Musk implied that Detroit will survive. "I think it'll probably be a healthier place. This has been somewhat cathartic. Maybe, I think, maybe I'm being overly optimistic, but I think this will be a cathartic experience," Musk said. "I think GM and Ford, maybe not Chrysler, but GM and Ford will come out of this healthier...and more competitive."

He wants Tesla to be part of that, obviously.

"I'd like to take up some of the manufacturing plants," he said. "When the mess gets sorted out I'd like to have a conversation with whoever's in charge."

Updated at 8:30 a.m. PT with full statement from Tesla Motors.

The founder and former CEO of Tesla Motors, Martin Eberhard, is suing the company and current CEO Elon Musk for libel and breach of contract, opening up another lawsuit at the young electric carmaker.

The lawsuit (click for PDF) alleges that Musk sought to "rewrite history" by taking credit for the accomplishments and the very idea behind Tesla Motors, resulting in a damaged reputation for Eberhard. The suit was filed in the last week of May but become public on Wednesday night.

Happy times: Tesla founder Martin Eberhard on the road with his Tesla Roadster.

(Credit: Martin Eberhard)

In addition, the suit alleges that the company did not honor its agreement with Eberhard after he was removed as CEO. In particular, the suit says that Eberhard did not receive the valuable second Tesla Roadster produced as promised and that the car he did receive was damaged in a poorly-run road test.

It's well known that there's no love lost between Musk and Eberhard. Musk, who became an investor in Tesla in 2004, ousted Eberhard from the CEO position in 2007 and eventually took over the position himself. In media interviews, Musk said that he needed to take the helm of the company after poor management resulted in production delays and technical problems.

In the complaint, Eberhard asserts that these public comments have defamed him and he is seeking damages from a jury trial.

The text of the complaint offers an inside look at the tense wrangling between the two men and the tumult within the company two years ago. Addressing Musk personally, Eberhard's complaint says that Musk misrepresented his academic accomplishments at Stanford University and the University of Pennsylvania.

Not surprisingly, Tesla Motors has a different view of the events and expects to file counter claims, a company representative said on Thursday:

"This lawsuit is a fictionalized, inaccurate account of Tesla's early years--it's twisted and wrong, and we welcome the opportunity to set the record straight. Incidentally, Tesla will also be filing counterclaims and in the process present an accurate account of the company's history," according to a statement from company representative Rachel Konrad. "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."

Separately, in his blog Eberhard said he is now working on building a mobile charging device for Tesla Roadster owners.

Tesla Motors' Elon Musk has a friend in David Letterman.

Musk, the CEO and product architect of electric car maker Tesla Motors, was a guest on the "Late Show with David Letterman" Wednesday night. Also making an appearance on the set was the prototype Model S electric sedan, which made its first trip to New York this week.

But even though Musk and the Model S were the main event (well, after actress Jennifer Garner), Letterman did most of the talking. Actually, "complaining" might be a better word.

David Letterman finds a sympathetic ear with Tesla Motors CEO Elon Musk.

(Credit: Screenshot by Martin LaMonica/CNET)

Letterman is frustrated, downright irritated, that electric motors, which have been around for 100 years, are still considered cutting-edge technology. The Chevy Volt's 40-mile range is "crap," good enough to get the paper at the end of the driveway, he joked.

"If (auto companies) were actually working on technolgies that were actually in showrooms, they wouldn't need to be closing down plants and filing bankruptcies," Letterman griped.

As for the electric Tesla Roadster sports car, Letterman called it "bulletproof" and said it drives like a "bat out of hell." He admitted, though, that the first time he charged the car he was nervous it would burn down his house and "magnetize his nuts."

Musk did manage to get a few words in. He reiterated that the company's long-term plan has always been to build a mass-market car. "Anyone who does buy the Roadster is helping pay for the development of low-cost cars to follow," he said.

The reason Musk is pouring his energy and much of his personal wealth into Tesla is to spur the electric car revolution. "I thought that the existing car companies would do it," he said.

Both Musk and Letterman took digs at General Motors and its decision to cancel its EV1 electric cars, which were crushed when the program was canceled despite loyal customers. "With the benefit of hindsight, I think that (GM) should have built an EV2 rather than crushing them," Musk said.

After a commercial break, a curtain lifted and the Model S electric sedan rolled out, welcomed by oohs and ahs from the studio audience. Tesla will open a showroom later this year in New York.

While Letterman opened the door and poked about, Musk tried to make an "important point" about the Model S, which he said will be ready in "a couple of years."

But we may never know what Musk had to say. Letterman grabbed the steering wheel and started yelling "I'm being electrocuted!"

"Late Show with David Letterman" airs on CBS. CNET News is published by CBS Interactive, a unit of CBS.

Photos: Tesla Model S hits New York party scene

Elon Musk, chairman of Tesla Motors

(Credit: Stefanie Olsen/CNET News.com)

Corrected, Sunday 9:30 a.m. This blog incorrectly described Musk's relationship with the company. He is chairman of Tesla Motors.

SANTA CLARA, Calif.--Elon Musk, the chairman and major funder of Tesla Motors, said here Saturday that he plans to take his electric sports car company public by the end of 2008.

Before the IPO, however, Musk said he will raise a series E round of financing to bring the company to profitability and begin production on Tesla's luxury electric sedan, codenamed White Star, by 2010. The goals will be reached by selling a roughly 10 percent stake in the company in the series E round, and through a Department of Energy loan of between $100 million and $200 million, Musk said.

A future IPO would raise on the order of $100 million, he said.

Musk, who was speaking here at the TieCon conference ("Tie" is short for "The Indus Entrepreneur"), also said that he's considering how the company might allow customers of the $100,000-plus Tesla Roadster to invest before the IPO, similar to the auction-style offering that delivered Google to the public markets.

Meet Tesla's first two prototypes, and click on the image to see more photos.

(Credit: Corinne Schulze/CNET Networks)

"We are trying to figure out if there's a way for Tesla customers to invest in that (series E) round...but we want to make sure we don't step on any legal landmines," said the 36-year-old Musk, dressed in his characteristic T-shirt (Solar City), jeans and cowboy boots.

Musk was here to give a keynote at the two-day conference, which drew as many as 4,000 attendees. During his interview on stage with Silicon Valley author Mike Malone, he talked about his three long-time passions: the Internet, renewable energy, and space exploration.

During the dot-com heyday, Musk of course founded two Internet companies--the most notable of which, PayPal, sold to eBay for $1.8 billion. Now, he owns two companies related to renewable energy, Solar City and Tesla Motors. And in space exploration, Musk runs SpaceX, a private rocketry company that has secured a contract with NASA to replace the space shuttle after 2010 in servicing the International Space Station.

Clearly a pioneer in these fields, Musk has bold predictions for these markets. One is that he will put a man on Mars by 2030. Though he admitted that might not come true by then.

He was more definitive about the other goals.

"Thirty years from now the majority of new cars will be pure electric, not hybrid," Musk said. On renewable energy: "We will derive more energy from solar than anything else in the United States."