Late Friday evening, Tesla Motors issued a brief statement that company founder Martin Eberhard was transitioning from his management role as President to the company's advisory board. This announcement came barely a day after the announcement that Ze'ev Drori had been tapped to be the new CEO, taking the reins from interim boss Michael Marks. Drori is now also taking up Eberhard's title as President. After the announcement it became clear that Eberhard did not relinquish his duties voluntarily. He is no longer even on the board of directors and the advisory board gig is at best ceremonial. The company isn't saying much, but in a posting on the Tesla Motors Club message board, Eberhard made it clear that it wasn't his choice to leave the company. A number of executives have apparently left the company in recent months as engineers have struggled to overcome transmission problems that have delayed the production launch of the Roadster. At the same time that they are trying to get their electric sports car into production, engineers are trying to finalize the specifications of their next product: the "WhiteStar" sedan.
While people are moving in and out of offices in San Carlos, Tesla is planning to have its first media drives with the print publications this week, while us on-line types will have to wait a few more weeks for our turn at the wheel.
[Source: Tesla Motors, Tesla Motors Club, via AutoblogGreen]
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Reader Comments (Page 1 of 2)
Yubastard @ Dec 2nd 2007 9:10PM
wow, wonder if he still gets a check?
John @ Dec 2nd 2007 9:44PM
Sounds to me like someone got stabbed in the back by his own company!!! I hope he gets a check or thats just wrong. Unless there is alot we just do not know.
Jason @ Dec 2nd 2007 9:53PM
I hope this isn't the day that we come to look back on as the death of Tesla Motors. How very disappointing.
psarhjinian @ Dec 2nd 2007 10:12PM
This is what happens when your PR gets ahead of your balance sheet. I don't think Tesla had a viable business model, and they didn't have the ability (or the will) to convey that to the VCs that backed them.
That you've got engineering working on the next project without having solved the first is unsurprising. It speaks of management by misdirection. Expect a name change or "mission statement" soon.
This is the start of the fallout: the dollars aren't there, and people who were expecting a payout are asking questions, and the people who should have known better are, without answers, looking for people to blame.
tc @ Dec 3rd 2007 4:48PM
I agree. I think the PR got ahead of the actual development cycle and too many promises on deliverables were made. I interviewed at Tesla in the summer of '06 for a marketing position, and at that time they were talking about getting the first cars to market in late '06 early '07. I feel bad for Martin though, my impressions of him from interviewing was that he was a leader and had a clear vision of developing & building the next gen electric vehicles.
I think the internal rumblings about sourcing cheap(er) vendors (especially critical parts like batteries) from Asia also caused some internal dissention.
tc
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Snowdog @ Dec 2nd 2007 10:19PM
No this is what happens when the money men move in and toss out the founders. Cisco founders were likewise tossed from their own company. Steve Jobs was tossed by the guy he brought in to run the company.
Greed and pride in action.
Vince Burlapp @ Dec 2nd 2007 10:21PM
Is that the beginning of the end for these guys?
Why so many changes. Why in the hell would they get rid of the founder???
len simpson @ Dec 2nd 2007 10:22PM
happens all the time, remember when GM was first forming? & there was Durant & Dodge bros & something about Lincoln etc, etc. I,m old enough to remember but, --- I forget.
elprogramer @ Dec 2nd 2007 10:37PM
They're completely different. Billy Durant was forced out because of disgruntled executives and opportunistic and frightened bank investors.
This is more akin to Ford, who was forced out of his first company for building his pet projects. The board of that company actually tapped Henry Leland, who renamed the company to? Yep, Cadillac.
HotRodzNKustoms @ Dec 2nd 2007 11:21PM
The founder was probably slowing down the car to market trying to keep on doing whatever he does and the investors filled their own people in while they got impatient about not seeing any return on investment.
Michelle @ Dec 2nd 2007 11:37PM
Or maybe, just maybe, Eberhard was doing a bad job and needed to go.
I really can't buy these suggestions that "the money men" forced him out. Tesla is already owned by some of the biggest "money men" in the world. Elon Musk and Sergy Brin are worth billions and billions of dollars, both have been in from almost the start.
My guess is that Eberhard had become a problem. Maybe he was married to some unattainable goal and refused to listen to reason? Maybe he had a personal problem? Or maybe he had grown into a bad manager and angering valued employees?
We may never know the full truth, but I very much doubt that he was pushed out by the money men. I simply can't imagine Elon Musk and Sergy Brin pushing him out for money. There HAD to be somthing else, probably something directly related to Eberhard's performance.
why not the LS2LS7? @ Dec 3rd 2007 12:32AM
I'm not sure how the idea of "money men" forcing him out and him needing to go are in conflict? If he needs to go, who's going to be the ones to get rid of him? The ones with the biggest stake, the "money men".
I'm convinced that it was the money men who put him out. But I don't attach anything else to that. They did it, why is an open question.
Michelle @ Dec 3rd 2007 1:27AM
Of course the majority shareholders fired him. They are the only people who COULD fire someone his his position.
By calling them "money men" and saying they "forced him out", you paint this in the most negative way possible. It brings to mind occasions when founders have been ousted merely to disenfranchise them of their ownership.
Maybe that did happen, but I doubt it. I don't think multi-billionaire majority shareholders fired Eberhard in order to steal ownership from him.
It's been obvious for some months that the majority shareholders of Tesla had lost confidence in Eberhard's management of the company. Things now seem to have reached a breaking point. Eberhard had been pushed aside some months ago, but only recently has the new CEO officially taken over.
CEO's are typically strong personalities. This is why a sacked CEO almost always leaves a company when a new CEO comes in. The last thing a new CEO needs is his predecessor questioning his every move or poisoning him within the workforce. I'm not saying Eberhard did any of this. But it shouldn't be surprising to anyone that a former CEO is pushed out when a new CEO his hired. It's usually good business.
Steven T. @ Dec 3rd 2007 12:04AM
Visionaries aren't always effective implementers. While it remains to be seen whether the initial product has a viable niche, I have serious questions about their proposed sedan. Maybe what we're seeing is the beginning of a mid-course correction. That could be a very good thing. Or not. Time will tell.
Mark @ Dec 3rd 2007 12:10AM
Eberhard is a visionary, theres absolutely no doubt about that. However, being a visionary does not, in any way, ensure the fact that you have the capability of running a company. It's entirely plausible that Eberhard's skills aren't tuned toward leading a company, and that someone more qualified existed to take his position. This happens all the time, it happened in the late 80s when Steve Jobs was fired from Apple. He came back a decade later knowing that he himself was not a leader, but a visionary, and is a much better businessman for realizing it. This is not stabbing Eberhard in the back, it's not seedy, or underhanded in any way, shape, or form. It's very likely that this is simply what's best for Tesla Motors.
500 @ Dec 3rd 2007 12:36AM
It's all a scheme by the evil oil companies, George Bush and GM to kill the electric car!
tankd0g @ Dec 3rd 2007 1:00AM
If your company is held by investors, it's not "your" company anymore. They want a return and so far he hasn't produced any.
Mike @ Dec 3rd 2007 1:06AM
While it's unfortunate that one of the minds that got this off the ground is now being forced out, we shouldn't be surprised if there is more turmoil to come from Tesla.
The car industry is probably one of the most inaccessible industries in the US. And starting a manufacturer from scratch to build a series production car is a monumental undertaking for even a large company. All the engineering and expense required to meet regulations is tough enough never mind engineering a car that will work as advertised and preparing for possible future litigation for the guy that gets electrocuted trying to jump start their friends Kia with the 1.21 "jigawatts" of battery juice available in the Tesla.
It doesn't matter how deep the pockets are of the people funding the company, making a car company successful is the trick. And as we've seen from GM and Ford throwing massive amounts of money at "losing" cars, we know money does not = success.
The British seem to be far more successful than us at having a cottage car industry. Ever heard of the TVR, Noble, Morgan, Lotus, Ascari etc. I don't know what the reason is but I would imagine that they aren't buried in government regulation and/or they have car building in their dna. Whatever the reason, they sure seem to have more niche supercars.
why not the LS2LS7? @ Dec 3rd 2007 1:29AM
TVR is out of business again. Noble is in dire straits (http://www.carmagazine.co.uk/news.php%3fsid=166%26page=1).
Lotus is owned Proton, a company owned by the government of Malaysia.
The UK gives very favorable rules to their small car companies and they still have a lot of trouble.
naggs @ Dec 3rd 2007 3:12AM
all those british cars companies go under because they overexpand the instant they make money. the successful niche sportscar makes them some money so they expand the model range and production capacity. the instant one model isnt a hit and demand begins to slow, the company is dead.
all these companies need to take a lesson from Harley Davidson, keep a long line for your exclusive high profit margin niche product and you might live to see the next decade.
lotus came back from the brink of extinction with new owners and had one successful product. the europa is a failure and the other two cars they are working one will also be failures. i expect lotus to be dead/under new ownership buy the end of '09
shoulda stuck with the elise/exige and just refined that car instead of trying to be a british porsche
tesla very well might have fallen into that trap before they even had their first successful product, the dot.com of car companies, lots of excitement and investment but no viable busness plan