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.

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.