One afternoon in July 2006, the emerging electric car manufacturing company Tesla invited reporters to attend a ceremony to introduce a two-seat electric sports car with an electric convertible, with an introductory price of $ 100,000. At the time, very few industry experts believed that this would be a successful product.
CEO Martin Eberhard was confident that sooner or later, the rise of technology in Silicon Valley would teach Detroit’s auto giants how to build zero-emissions cars. He also believes that Tesla’s first prototype, a modified Lotus Elise with a 7,000-cell lithium-ion battery pack, will soon be replaced by lower-priced family sedans. The vision that Martin Eberhard launched 15 years ago has become a reality, only he himself has long since ceased to be CEO of Tesla.
Just this month, Tesla became the first automaker to reach a staggering $1 trillion valuation, but the CEO who introduced Tesla to the press 15 years ago is no longer with the company. Currently, Elon Musk – Tesla’s earliest investor, is holding the position of CEO of the electric car company. Elon Musk was also present at Tesla’s launch in 2006, but his role was quite obscure then. He only appeared with a presentation about the need to switch from petrol cars to electric cars as soon as possible.
In 2003, it was Martin Eberhard and Marc Tarpenning who together founded Tesla – a company named after the famous scientist and inventor Nikola Tesla. Both were the original shareholders of the company, as well as the first to claim ownership of the trademark of one of the later Detroit “spinning” technology businesses. However, none of them retain enough Tesla shares to be able to become billionaires and their current assets are much less than the total worth of billionaire Elon Musk’s $280 billion according to Elon Musk. Forbes as of 11/10.
Martin Eberhard (left) and Elon Musk. Photo: Getty Images
In fact, it is the capital that billionaire Elon Musk poured into Tesla that has contributed to making Eberhard and Tarpenning’s vision a reality. Elon Musk himself has taken full control of Tesla through steadily raising his stake in a series of 9 rounds of funding before Tesla’s official IPO in 2010. Even now, the company’s shares Elon Musk continues to grow as the billionaire receives quarterly stock bonuses – worth billions of dollars – in lieu of salary.
In an interview, Eberhard said he still holds a “relatively small” stake in Tesla, but declined to give specifics. “I sold a large amount of my stock quite a while ago,” said former Tesla CEO Eberhard. “People sometimes have the idea that I was a millionaire when I founded Tesla, but that’s not the case.”
He also shared, if he himself became richer by selling Rocket e-books – a product he and Marc Tarpenning created together in the late 1990s – then the two would not need to look for sources. initial capital from Musk.
Billionaire Elon Musk often says he doesn’t care about wealth and sold his Los Angeles mansion last year to live in a modest prefab house on the SpaceX campus in Boca Chica, Texas. However, Elon Musk is still getting rich quickly with a remarkable rate of wealth accumulation thanks to early ownership of nearly 20% of Tesla shares as well as a long-term compensation package in the form of stock options bonuses announced by the company on December 1. 2018. Accordingly, Elon Musk will receive billions of dollars in Tesla shares every time the company achieves its quarterly business performance target.
Meanwhile, Eberhard sold most of his shares after being ejected from Tesla in 2007, before Tesla’s first model was officially launched. In 2009, Eberhard filed a lawsuit against Elon Musk, but the lawsuit was later settled on undisclosed terms.
“When I got kicked out of Tesla, I really didn’t have a dime in my pocket“, Eberhard said. Not only that, he was not allowed to apply for jobs at other companies for about a year because of the limited agreement on intellectual property with Tesla.”I didn’t participate in any funding rounds after leaving“.
Eberhard did not provide details on how many Tesla shares he holds, but he insists he is not a billionaire. The Tarpenning co-founder also said he still owns Tesla stock, but he is not on the list of the company’s largest shareholders.
Ian Wright is one of the five co-founders of Tesla. Photo: AP
Of the five official co-founders, only Straubel, who left Tesla in 2019, is likely to become a billionaire thanks to the number of Tesla shares he holds. Assuming Straubel retains most of its stock, that stock could be worth around $1.3 billion by this point. Engineer Wright, who joined Tesla just a few months after Eberhard and Tarpenning founded the company, left in 2004 to start another electric vehicle company. He sold his shares many years ago and told Forbes that he currently “owns no shares of Tesla” and can’t imagine the company could one day reach a valuation of up to $1 trillion.
More than just making Elon Musk the world’s richest man, Tesla – as a leader in the electric vehicle revolution – has helped board members and investors like venture capitalists Oracle’s Ira Ehrenpreis and Larry Ellison or Elon Musk’s younger brother quickly became rich.
Before achieving the stability and success in the electric vehicle sector today, Tesla went through a tumultuous period in terms of operational strategy and management.
The early days of Tesla’s operation are still characterized by a high level of management as well as strategic chaos. That led to a single founder taking control. While other tech giants with trillion-dollar valuations like Microsoft and Alphabet have made many of their co-founders billionaires, a situation like Elon Musk’s must be all too unusual.
“A similar situation happened at Apple,” said David Hsu, a professor of management at the University of Pennsylvania’s Wharton School, which at the time of his death in 2011, Apple co-founder Steve Jobs owned shares worth about $2 billion, while co-founder Steve Wozniak’s fortune is estimated at around $100 million, and Ronald Wayne – Apple’s third little-known co-founder – was early. Sells his shares for $800.What billionaire Elon Musk has now is simply the result of a risky bet many years ago.
“It’s not just the share ownership of the co-founders. We can also point to many cases where investors – including angel investors or venture capitalists – have missed their chance.” said Mr. Hsu.At the time Musk invested in the Series A round and for a considerable amount of time afterward, no one could be certain of how likely Tesla would be to succeed. Some people might argue that that mentality is somewhat still true today“.
Regarding the 2009 agreement, Eberhard refused to share his personal views on billionaire Elon Musk. In contrast, billionaire Elon Musk himself is much more outspoken. In an interview last January, he even described Eberhard as “literally the worst person I’ve ever worked with“.
However, the first former Tesla executive – who owned “less than” 5% of the shares when he left the company – said he was still very satisfied, despite not reaping much profit from the development of the company. Tesla.
“I am really happy with the success of the company today” Mr. Eberhard affirmed.
“It is important that we stop using fossil fuels and Tesla is the main driver of that. That is also the goal we have set forth from the very beginning. Whatever my opinion of Elon Musk, I’m happy to see the electric car revolution – the revolution we started – is and will certainly succeed.“.