Strange - it has been removed from the tesla blog.
With the recent lawsuit filed by Martin Eberhard, which seeks to perpetuate a version of Tesla’s history that is at odds with the truth, I felt it was important to set the record straight. This post is not a complete response to the allegations in the lawsuit (we will be responding fully in court soon), but rather an effort to correct several misconceptions propagated by Eberhard that are now being reported as truth.
I’ve included several relevant emails as source documents to show that this is more than just my subjective opinion versus Eberhard’s. As you will see, the evidence overwhelmingly supports a different account of the past than the one presented in his lawsuit.
At the heart of his attack, Eberhard plays to a common archetype – that of the noble inventor whose invention is usurped by the rich and powerful businessman. He has labored hard to create this impression and there is an intuitive appeal to it, as there is with any archetype, but in this case it is false.
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.
Some Personal Background
My interest in electric cars reaches back two decades to when I was doing my undergraduate degrees in physics and business as a student at UPenn/Wharton. Bizarrely, Eberhard’s lawsuit claims I didn’t get those degrees, even though a casual search of the web shows I recently gave a talk there about Tesla and SpaceX, where the University listed my degrees on the poster.
I felt then, as I do now, that electric cars were the right technical solution to sustainable transport. As a student, I would talk to pretty much everyone I knew about them, including people like Christie Nicholson, now a writer for Scientific American, who still remembers the conversation 17 years later.
After working briefly on ultracapacitors at Pinnacle Research in Silicon Valley to understand their potential as an energy storage mechanism for electric cars, I decided to do graduate studies at Stanford in materials science & applied physics. My thesis idea was to use advanced chip making equipment to create a solid state capacitor with enough energy density for use in electric cars.
I ended up putting my graduate studies on hold to start a couple of Internet companies, and with the capital from these ventures, was able to take real action in two more areas that I had always considered truly important. These were space technology and the transition to a sustainable energy economy including, of course, the creation of a viable electric vehicle.
In addition to my Tesla duties, I still serve as CEO and CTO of SpaceX, leading design of the rockets as I’ve done for the past 7 years. Last year, we reached orbit and won the primary NASA contract to replace the cargo transport function of the Space Shuttle when it retires in late 2010.
Despite putting grad studies on deferment two days into the first quarter, my connection to Stanford ended up being pretty strong and I still help out on the Stanford Engineering Advisory Council. Eberhard’s lawsuit also claims that I misrepresent my affiliation with Stanford, but I would not be on their engineering advisory council if that were true.
Reconnection with Electric Cars via AC Propulsion
In October 2003, Harold Rosen, the brother of Ben Rosen (chairman of Compaq, who bought my first company), invited me to lunch with himself and JB Straubel. They told me about a company called AC Propulsion that had developed an all electric sports car called the Tzero with a range of 300 miles, a 0 to 60 mph time of under 4 seconds and a lithium ion battery pack with seven thousand cells (email A below).
A few months later, I met with Tom Gage, president of AC Propulsion, who gave me a test drive in the Tzero, which confirmed their claims. Over the course of several months, I tried repeatedly to convince AC Propulsion to commercialize the Tzero, but they were not interested. When I said I was moving forward with creating an electric car company anyway, Tom Gage offered to introduce me to one of two groups that were interested in commercializing the Tzero concept (email B below). The first one they introduced me to was Martin Eberhard and Ian Wright. Marc Tarpenning wasn’t present at the first meeting.
At the time, “Tesla Motors, Inc.” consisted of Eberhard, Tarpenning and Wright, plus an unfunded business plan and they were looking for an initial round of funding to create a more advanced prototype than the AC Propulsion Tzero. While there was a basic corporation in place, Tesla hadn’t even registered or obtained the trademark to its name and had no formal offices or assets.
To save legal fees, we just copied the SpaceX articles of incorporation and bylaws for Tesla and I invested $6.35M (98%) of the initial closing of $6.5M in Series A funding. Eberhard invested $75k (approximately 1%). In another crossover, I had the same people who created the SpaceX logo also create the Tesla logo. I became chairman and provided top level guidance on the technology and product design, but left the day to day running of the company up to Eberhard, trusting him to execute on the task of commercializing the Tzero.
Shortly after funding, I convinced JB Straubel to join Tesla when he called to ask about the company. JB ultimately led development of the Tesla powertrain well beyond what we initially licensed from AC Propulsion, to the point where we are now far in advance of that early prototype and no longer employ any of their original intellectual property. JB was recognized as 2008 innovator of the year by MIT for his work on the Roadster and, by any reasonable definition of the word, should certainly be considered a member of the founding team of Tesla, along with Eberhard, Tarpenning, Wright and me.
Commercializing the AC Propulsion Powertrain and Developing a Chassis
For the first few years of Tesla’s existence, I trusted Eberhard to execute on the operational task of taking the Tzero concept and creating a commercial electric sports car. My involvement was primarily focused on the body design, technical specifications and building the Tesla brand.
Eberhard has simultaneously implied that I had nothing to do with the creation of the Roadster and that I micromanaged the design and thus caused the cost overruns. Obviously, those claims are mutually exclusive. The reality is that I spent considerable time on the details of the product and particularly the body styling — you will see elements of two of my favorite cars (Porsche and McLaren F1) in the Roadster body — but left most day to day management of the company up to Eberhard.
One of the most difficult battles I had with Eberhard on the product detail and body styling was over the door sill. I insisted that we lower and narrow the door sill by two inches, to make the vehicle easier to enter and exit . As it turned out, we were forced to redesign the chassis anyway, so we gained this advantage at no cost or schedule impact.
There were several smaller items I suggested, such as the touchpad door latch that Eberhard tries to use as an excuse for why it cost over $140M to bring the Roadster to market instead of the $25M that he estimated in the 2004 business plan. That would have to be one hell of door latch! The $140M excludes any costs associated with the Model S.
The real reason that Roadster development cost so much more than can be accounted for by typical entrepreneurial hubris is that we essentially had to spend the development money twice. After Eberhard was asked to step down from the CEO role two years ago, almost every major system on the car, including the body, HVAC, motor, power electronics, transmission and battery pack, had to be redesigned, retooled or switched to a new supplier. With the release of the Roadster 2 this month, we are finally at the point where Tesla has a solid supply chain and a unit cost that allows us to operate the Roadster business line profitably.
Uncovering the Problem
We conducted a funding round in May 2007 that was intended to be the final round before Roadster production and profitability. In that business plan, Eberhard stated that the cost of the Roadster would be $65k after the first 25 units. When I questioned that number, based on piecing together what I’d heard from various people in the company, Eberhard told me that while the initial cost may be higher, he still felt confident of achieving $65k or lower after the first 100 units.
Eberhard also told the board that Tesla would be in production by Sept 2007. It is worth noting here that both the unit cost and production timing *included* all the extra features and delays that Eberhard ascribes to me. In his lawsuit, Eberhard claims that I was opposed to hiring a CFO when nothing could be further from the truth. Contrary to what he claims in the lawsuit, one of my highest priorities was bringing on a VP Finance or CFO (email C below).
In July 2007, one of the new investors in Tesla sent in someone to help with supply chain issues. While he was doing that, he conducted a cost audit of the Roadster and discovered that the production cost after the first 100 cars would be about $120k – almost twice what Eberhard was claiming it cost. Several months later, that actually turned out to be an underestimate, as material cost alone was $140k. Given that we had been charging a price of $92k and had taken advance orders for hundreds of cars, this meant we had a life threatening problem.
The cost auditor also discovered that there was no possible way that we would be in production or pass our regulatory requirements by September 2007. As it later turned out, not a single major vehicle sub-system would be ready anywhere near that time. Initially, not being aware of the depth of problems at Tesla, the board and I were under the impression that it was just a matter of fixing the transmission. That did turn out to be the long pole in the schedule, but there were a host of other issues behind it.
Michael Marks Steps in and Eberhard Departs
As soon as the auditor from private equity firm Valor Equity Partners informed me of the problem, I called Michael Marks, the retired CEO of Flextronics and a Tesla investor. Michael wasn’t willing to be the long term CEO, but he understood the gravity of the situation with Tesla and agreed to step in as the interim CEO in August 2007. Since he was coming in cold to a difficult situation, I increased my time allocation to Tesla, becoming in effect the co-CEO.
As Michael and I delved into the problems, it soon became apparent that they were even more severe than first appeared. One thing after another had been swept under the rug or simply ignored.
At this point in time, the Tesla board and I were still willing to give Eberhard the benefit of the doubt and assume he was simply ignorant of the problems. It is common in rapidly growing startups for the company to exceed the management ability of the CEO and for things to get out of hand. So, instead of firing Eberhard outright, we just demoted him to president, hoping that he could become a productive member of the team with a level of responsibility that he could handle.
After a few months, it soon became apparent that Eberhard had in fact known that the cost was far in excess of his estimate and that there was no chance of meeting the promised production schedule. Fortune magazine in July, 2008 quoted a former Tesla executive recalling an Eberhard statement to him about the cost overrun, “If this is true, you and I are both fired.”
It would have been forgivable if Eberhard had simply been in over his head and didn’t know how bad it was. However, here we had a situation where he was in possession of materially negative information, yet failed to inform the board and implied to the management team that they would lose their jobs if the information was discovered by the board. There was obviously no way that Eberhard could be allowed to remain as part of Tesla at that point.
Michael Marks (email D below) and the Tesla board at the time — which included someone that Eberhard himself had placed there, the head of Chicago-based Valor Equity Group and the managing partners of two major Silicon Valley venture firms — agreed unanimously that Eberhard should no longer be a part of Tesla. We considered filing legal action against him, but felt that there was little to be gained. The company needed to focus on fixing its problems and a lawsuit against the former CEO would not help our cause.
Solving the Problems
With the transitional help of Michael Marks for the few first months and then Ze’ev Drori for several months after that, it has taken me two years to do a near complete reset on the Roadster program. Due to the low production rate, the Roadster cost will never be what Eberhard promised, but an incredible effort by the development, supply chain and manufacturing teams has brought the Roadster material cost down from $140k to approximately $80k as of this month. Combined with a steady production volume of 20 to 30 per week in the third quarter this year and a good take up rate of the higher priced Roadster Sport, we expect to cross over into profitability next month.
Starting in late 2007, one of the first things we did to solve our problems was move battery pack production from an outsourced factory in Asia to California. This may sound counter-intuitive, but our unit cost actually went down and quality improved as we went to a more automated system and could iterate quickly with engineering to find design efficiencies.
Avoiding the cost of shipping a half ton pack from Asia also meant significant savings on shipping costs. This is a much bigger deal for a heavy and bulky product than a small consumer electronics device, where outsourcing to Asia makes a lot more sense. Very importantly, our supply chain went from a tectonically slow six months and having to pay for tens of millions of dollars of inventory in transit to a matter of a few weeks.
Since Eberhard had made production commitments to Lotus, we were obligated to pay for those production slots even though we couldn’t use them and were hit with a $4M penalty. Fortunately, Lotus recognized that Tesla was in dire straits at the time and forgave about half of the penalty.
The body supplier chosen by Eberhard was only able to deliver 1 body per week and even that required extensive manual rework. It turned out that Lotus had explicitly warned Tesla not to use that supplier for any painted body surfaces, but Eberhard had done so anyway. It took a year to transition to Sotira in France, Lotus’s body supplier. Almost none of the body tooling had been made correctly, so we had to spend another $5M in new body tooling.
The transmission was perhaps the biggest fiasco and another case of Eberhard trying to twist the facts and shift blame from himself to me. It is true that I felt strongly that the Roadster should not have performance that was far worse than sports cars that cost half the price, which would have been the case if Tesla had stuck with a single speed transmission and the same motor torque as the Tzero.
What Eberhard forgets to say is that both JB and I wanted to use a single speed transmission and increase the motor torque from the AC Propulsion design to achieve compelling performance. When we suggested that path, Eberhard insisted that it would be easier to do a two speed transmission, that it would not affect the September 2007 production date and, in his view, that drivers like changing gears.
Eberhard initially proposed using a two speed gearbox design of his own. When that didn’t work, he contracted with a UK racing transmission company to build the two speed. When that didn’t work, he signed a very expensive contract with a US transmission company, assuring the board that we were lucky to work with them. That cost us several million dollars and also didn’t work. Shortly after Eberhard’s departure, we went down the path of a single speed transmission with upgraded motor. That worked well and was implemented in all Roadsters.
There were also a host of smaller pre-production problems that each cost several hundred thousand to a million dollars to solve, such as switching to an HVAC system that worked consistently and getting rid of an obsolete stereo/navigation head unit.
Second vs Third Production Car
This point is so trivial that I’m nearly inclined to skip it. However, in the absence of an explanation, it may sound as though I was being petty in giving Eberhard the third production car rather than the second production car.
The reason for the delayed delivery was that there was considerable debate at the board level as to whether Eberhard should receive a car at all or whether he should be refunded his money. In large part, this debate was prompted by an email from Darryl Siry, who was head of Sales, Marketing & Service at the time.
Siry strongly recommended that the board consider refunding Eberhard, as there was a high risk that he would use the vehicle as a pulpit from which to attack Tesla, given his history of repeated disparagement (email E below). While the board deliberated on the matter, manufacturing needed to move forward, so production unit 2 was badged as serial number 3.
After some deliberation, the board (including me) did decide to give Eberhard a car, so he received production unit 3, but badged as serial number 2. Unfortunately, Siry’s concern turned out to be valid when Eberhard wrote a well publicized and needless (a fix was already in progress) negative blog piece regarding the battery coolant pump soon after receiving the car.
The reason I have production unit 1 is that the board agreed that the early cars would be sequenced by when payment arrived. My wire arrived shortly before Eberhard’s, which is why I have P1 of the Roadster. For the Model S, the same rules applied, but someone else’s payment arrived first, so I will not receive P1.
Eberhard also claims that Tesla “wrecked” his historic vehicle. What actually happened was that during pre-delivery inspection - a comprehensive exam that includes road testing to ensure high quality at the time of delivery - a technician got into a low speed accident with the car. The fix required some new body panels, bolts and other easy repairs and was delivered as good as new.
Other Progress at Tesla
In the past 18 months, we have also created a sales, marketing and service capability, opening our first Tesla store in May 2008. We will soon have sales & service centers in LA, Silicon Valley, New York, Chicago, Seattle, Miami, London, Monaco and Munich. Several more locations in the US and Europe will follow later this year and then in Asia next year.
Following a visit I made to Daimler’s Stuttgart HQ in October 2007, they agreed to consider working with Tesla if we could produce a Smart electric vehicle prototype. JB and his powertrain team managed to get it done in 40 days and we soon reached a deal to produce 1000 battery packs and chargers with the potential for a lot more if that worked out well. The rapid execution of the Smart project embodies what is special about our company. Tesla is not about any one person – it is a team of almost 500 people, unfettered by bureaucracy, who are working incredibly hard to change the world for the better.
Daimler was so happy with the progress that a few months ago they decided to buy a roughly 10% stake in Tesla. Given that Daimler prides itself on integrity and conducted exhaustive due diligence, they would not have insisted that I remain CEO as a condition of the deal if Eberhard’s attacks had merit. It is also curious that Eberhard would choose to file his lawsuit now, almost two years after the date he claims he was wronged, on the heels of Tesla receiving a cash infusion from Daimler.
Beyond the investment itself, Daimler will be providing engineering and production support for the Model S. We also expect to work on another joint vehicle program to be announced later this year. Like the Smart EV, that will also be an electric car that almost anyone can afford.
The Model S was a key valuation driver for Daimler and a lot of credit for that is due to Franz von Holzhausen and his team. Franz joined Tesla last year and created a world leading design group in record time. To save some money on real estate, we built the design studio in a corner of the SpaceX rocket factory and rapidly created our Model S prototype.
Within a few months, despite no advertising and the worst economy since the Great Depression, we received over 1000 orders with a minimum reservation fee of $5000, showing the intense demand for a compelling electric car. With a lot of effort, we were able to get the Model S price down to less than half that of the Roadster, due to much greater economies of scale and use of our lower cost, second generation powertrain.
Tesla is sometimes criticized for the fact that our first car is relatively expensive, implying we thought there was a shortage of sports cars for rich people! Obviously, the transition to electric cars can only occur if they are affordable. However, a low volume and fairly costly product like the Roadster is the only realistic initial option for a small startup trying to create breakthrough technology. New technology in any field takes a few versions to optimize before reaching the mass market and in this case it is competing with 150 years and trillions of dollars spent on gasoline cars.
I want to be clear, though, that we are trying to get there as soon as possible. My main reason for putting so much time and money into helping create Tesla is to speed up the transition to electric cars. This was not a case of rank ordering likely return on investment and concluding that the auto industry was the easiest way to make money! While I’m confident that Tesla will turn out to have a good return for investors, building a car company has to be one of the hardest ways to make a buck.
Although I sometimes disagree with the specifics of their strategy, I’m also glad to see many of the major OEM’s moving forward with either semi or fully electric car programs. The faster the industry transitions to electric, the better for the world. It is distressing when my comments about the Volt or plug-in hybrids in general are construed as an attack, rather than simply explaining, only when asked, why Tesla has chosen an all electric path. The Volt is in a different market segment from the Model S, but even if it weren’t, I would still wish it well (email F below).
As should be clear from Tesla’s relationship with Daimler and the many conversations Tesla has had with other automakers, I am not trying to keep our technology closely held. I am in favor of whatever ethically moves forward the electric car revolution, including the cars we produce, the cars we jointly produce with partners and the cars we inspire other companies to produce.
——————————————
A. Email thread that references the lunch with JB, Harold Rosen and me in 2003:
—–Original Message—–
From: Elon Musk
Sent: Thursday, October 23, 2003 3:28 PM
To: JB Straubel
Subject: RE: Thanks for the visitGood to meet you too, JB. Consider the Musk Foundation in for $10k of
the $100k needed for the long range demo.Will give AC Propulsion a call. This is really cool stuff and I think
we are finally nearing the point where electric cars are a viable
option.
Elon
—–Original Message—–
From: JB Straubel
Sent: Thursday, October 23, 2003 3:16 PM
To: Elon Musk
Subject: Thanks for the visit
Elon,
Thank you for having Harold and I over for lunch yesterday, it was
fascinating to see your company and hear your perspectives on where it
is going. Harold and I disagree somewhat on the relevance of manned
space exploration, but I am certainly inspired by the dream of seeing
humanity leave this planet for another in my lifetime. The greater
vision that you are working to achieve is really quite wonderful.
I just wanted to follow up on a few of our discussion topics over lunch.
First, I attached a brief informative overview of the long-range EV
project that I am putting together with Stanford. It truly is a
fascinating project and could have a phenomenal impact on the public
perception of EV range and viability. It is also a great way to keep a
whole new generation of engineers interested and educated in renewable
energy and efficient vehicles by building something that can really have
an impact on the field. I feel quite strongly that the future of
electric transportation will use high-energy density batteries instead
of fuel cells and this is one step toward demonstrating that. We aim to
demonstrate nearly 10x the current range of any electric vehicle. Early
on we had considered applying for a grant from the Musk Foundation but
the timing was difficult since we will be driving next summer. If you
have any interest in getting involved with the project I would be happy
to tell you more…we are still working to raise money for the effort
with the battery as the most expensive single vehicle component at
~$100k. That brings up the second topic;
AC Propulsion is the EV company that I mentioned to you. The sports car
they build is called the Tzero with a 0-60 time of 3.6 sec and a 300
mile range. Most of the specs on the web site are still from the older
lead-acid version as the Li-Ion battery has only been running for a few
months.
www.acpropulsion.com/
www.acpropulsion.com/tzero_pages/tzero_home.htm (with old specs)
They will be supplying the battery for the long-range car based on
developments for the Li-Ion Tzero battery. It is essentially ~10,000
small cells of the same type in a laptop computer.
If you would like to contact them just email or call Tom Gage. He is a
good friend of mine and their president/CEO. (###) ###-#### or
xxxxxx@xxxxxxx.com If you have the time, you should really ask them
to give you a ride in the Tzero. I’m sure you could get them to come by
El Segundo if you expressed an interest.
Thanks again for your time yesterday and the interesting tour! I wish
you the best of luck on all of your upcoming tests.
JB Straubel
B. Discussion with Tom Gage where I say that I’m going to figure out the best choice of high performance base car & electric powertrain and move forward with or without AC Propulsion. He then suggests introducing me to two groups that had expressed an interest to him in commercializing the electric sports car concept using AC Propulsion technology. The first group he introduced me to was Martin Eberhard, Marc Tarpenning and Ian Wright (I never did meet the second group).
The reason I wasn’t interested in starting out with a Mini or Scion conversion, even though a low cost car has always been my end goal, was that the high cost of the initial version of the powertrain combined with the low unit volume would have resulted in a cost of at least $70k per car. People will pay that and more for a high performance sports car, but not a Mini or Scion.
From: Tom Gage []
Sent: Monday, February 23, 2004 2:05 PM
To: Elon Musk
Cc: Alan Cocconi
Subject: Re: Noble M12
Elon,AC Propulsion shares your view that the top end of the market is a good place to sell electric vehicles. That is what drove development of the tzero in the first place. Our Scion plan, however, admits to the realities of ACP’s development limitations, the costs and risks of building a ground-up car, and the urgency of getting product to market. I appreciate your interest in helping us and I hope we can count on you for at least one unit investment ($140,000) even if we cannot build a car to your liking.
The Noble might make a good EV platform, but the difference between a battery, 240 liters, 700lbs and a gas tank, 60 liters, 120 lbs, means that major modifications are inevitable. Given our commitments, that sort of one-off vehicle project is not feasible for us at this time. We do remain committed to the high-performance two-seater concept. It requires a highly optimized platform, not a conversion, and we are working independently with two companies, one in Europe and one in California both of which want to design and build such a car. Both companies are in start-up mode. One will soon be shopping a business plan for funding, I do not know the funding status of the other company.
Would you be interested in participating with one of those companies as well as with AC Propulsion?
Tom
Elon Musk wrote:
> I’m thinking of buying this car without an engine, which is how it
> ships. Can AC Propulsion install an electric powertrain and battery?
>
> www.1gracing.com/index.html
>
> Having given this some more thought, I’m interested in helping AC
> Propulsion and being a modest investor, but am not at all interested in
> the Scion (or Mini).
>
> What I’m going to do is figure out the best choice of high performance
> base car & electric powertrain and go in that direction.
>
> Elon
C. Eberhard repeatedly rejected CFO candidates that were brought to him, sometimes without even talking to them, such as the example below:
—–Original Message—–
From: Martin Eberhard
Sent: Tuesday, April 24, 2007 12:56 PM
To: Elon Musk
Subject: FW: Resume - XXXXXXX
No real hardware/ inventory/ logistics experience…
Me
—–Original Message—–
From: Simon Rothman
Sent: Tuesday, April 24, 2007 12:33 PM
To: Martin Eberhard; Tim Wenzel
Cc: Elon Musk
Subject: Fwd: Resume - XXXXXXX
Hey Guys,
I have another CFO candidate to through into the mix.
His name is XXXXXXX. We worked together at XXXXXXX and he’s outstanding. You’ll notice that he is a very seasoned guy who understands accounting and finance.
He was the number 2 finance guy at XXXXXXX behind the CFO with responsibilities as Chief Accounting Officer, head of IR, and much of the finance org. He knows manufacturing accounting from his long tenure as a Big
6 accounting partner.
Take a look and let me know if you’d like to meet with him. I’d suggest he’s worth talking to this week to see how he stacks up to other candidates. I believe he could take Tesla public and manage the Street and all the strict SOX regulations.
Simon
The reason we brought on a VP Finance was that I told Ira Enhrenpreis of Technology Partners, who had co-led the Series D in May 2007, that finance was my number one concern at Tesla. If we couldn’t find a CFO that Eberhard and everyone else found acceptable, then let’s at least hire a VP Finance. This email shows the degree of my concern:
—–Original Message—–
From: Elon Musk
Sent: Sunday, July 29, 2007 1:05 AM
To: Ira Ehrenpreis
Subject: Re: Introduction: Mike Taylor
Please let me know if there is anything I can do to help expedite Mike’s
joining. Our financials are so f* up that we need him yesterday. Martin
has no clue what the cash projections are, which scares me silly.
If possible, he should sign an offer letter on Monday night.
—– Original Message —–
From: Elon Musk
To: Ira Ehrenpreis
Sent: Sat Jul 28 14:16:13 2007
Subject: Re: Introduction: Mike Taylor
Good guy. We should hire him as soon as possible.
—– Original Message —–
From: Ira Ehrenpreis
To: Elon Musk; mike@
Sent: Fri Jul 27 10:55:14 2007
Subject: Introduction: Mike Taylor
Mike, meet Elon Musk, the Chairman of Tesla. Elon, meet Mike Taylor,
someone who I believe could be a phenomenal contributor to Tesla.
I’ve attached Mike’s CV.
Mike, can you meet Elon at/near SF tomorrow/Saturday at 1pm?
I’ll leave it to you both to coordinate from here.
Let me know if/how I can be helpful.
Ira
D. Michael Marks email that he completely agrees with the idea of Eberhard leaving the board:
—–Original Message—–
From: Michael Marks
Sent: Thursday, November 15, 2007 10:38 PM
To: Elon Musk
Subject:
board I’ve thought about it, and completely agree with the idea that Martin
shouldn’t stay on the board, just fyi
Email presaging the host of issues that had to be fixed:
—–Original Message—–
From: Elon Musk
Sent: Thursday, August 09, 2007 08:56 AM Pacific Standard Time
To: Jim Marver; Ira Ehrenpreis; Antonio J. Gracias; kimbal
Subject: Fw: meeting
This is not good. Sounds like there are more issues that the board was not informed about. I will send out a note as soon as I talk with Marks and will ask him to email an assessment to the board as soon as he can.
Martin seems to be focused on his public image and position within Tesla, rather than solving these critical problems. If you should speak with Martin, please urge him to spend all his energy on making sure that the Roadster works and arrives on time. He doesn’t seem to understand that the best way to maximize his reputation and position within the company is to help get this right.
—– Original Message —–
From: Michael Marks
To: Elon Musk
Sent: Wed Aug 08 21:04:26 2007
Subject: meeting
Are you planning to be at Tesla on Thursday, if so, I’d like to meet with you, if not I’d like to speak with you tomorrow night. Lots of issues at this company, as you know, but some are a lot scarier and pressing than I thought
E. Email from Darryl Siry, VP Sales, Marketing & Service at the time, to Ze’ev and me, strongly recommending that the board consider refunding Eberhard’s money rather than deliver a car:
From: Darryl Siry
Sent: Thursday, May 08, 2008 6:28 PM
To: Elon Musk; Ze’ev Drori
Subject: Martin EberhardElon & Ze’ev
Some recent developments in the past few days have given me cause for serious concern regarding the amplification of Martin’s public statements about the company. I have come to the conclusion that Martin and his wife are hell bent on damaging the company by doing everything that they can to cast the company in a negative light and accuse the company of deceptive and unethical practices.
My counsel to you in the past has always leaned to the side of appeasement, thinking that by doing what we can to defuse the situation would minimize the negative publicity potential. Recent events have led me to a conclusion that Martin and his wife will continue to take every opportunity to damage the company through their statements in the press and on public internet forums. The fact that we are on the verge of delivering his car and he is increasing his attacks causes me to wonder whether we will ever be free from these unceasing attacks on the company.
In conclusion – I believe the board should take under serious consideration the severing of all ties with Martin Eberhard including the refunding of his reservation payment and cancelling of his order. If this course of action were to be pursued by the board, I would recommend that the company issue a public statement announcing our intention and outlining the rationale that led us to this conclusion. While this action may be considered severe and would no doubt create a stir, I feel this route may be better than subjecting the company to an unceasing negative publicity campaign that is fueled by his continued ties to the company as an early customer. Carolyn Eberhard’s comments in an email to me implying that they would seek to derail our attempts at going public is especially concerning.
I offer this suggestion with great caution, and suggest strongly that the board deliberate the pros and cons of such a course of action. I rely on the collective wisdom of the board to make the right decision here because I admit that I may be biased by the personal attacks levied at me by Martin and his wife in their public statements.
F. A lot of nonesense has been written about me attacking the Volt. It stemmed from a response I wrote to questions from Lyle Dennis, who runs the GM-Volt.com commentary website. Lyle wrote a blog posting that was actually pretty reasonable and not inflammatory. However, several other bloggers either intentionally or unintentionally recharacterized that posting as me launching an attack against the Volt.
The problem was exacerbated by the Letterman show, where Dave went on the attack against the Volt. Perhaps I should have tried to defend it, but I could barely get a word in edgewise at times and my main goal was promoting the Model S. I couldn’t even get in my “important point” at the end of the show! The point I was trying to make was that an electric car has a cost of operation that is much less than a gasoline car, since electricity is way cheaper than gasoline. Also, I made an offhand comment at a small talk I gave in Silicon Valley where I said one of the reasons we went pure electric was out of concern that the engine in a plug-in hybrid would feel like a lawnmower, since it would have to run at high rpm and work hard for its size. This was a small audience, but the event was recorded and posted to a website. From there, the same set of bloggers again inaccurately portrayed this as another big attack on the Volt.
Let me be clear that I wish the Volt and any other semi-electric or electric cars well. Whether you care about national security, balance of payments, the high long term cost of oil or the environment, the answer is still that the car industry needs to make the transition and sooner is better. Obviously, Tesla has its reasons for pursuing a purely electric path and I articulate those in the email below, but the automotive sector is (still) a very big industry and there is plenty of room for other solutions too.
From: Lyle Dennis
Sent: Sunday, March 29, 2009 6:43 PM
To: Elon Musk
Subject: Re: EREV
Thank you kindly for your reply and provocative, thoughtful insight. This will certainly stimulate a lot of discussion in my community. Thank you too for your brave stewardship of the electric car revolution.
I hope to be able to meet you someday.
Lyle
On Sun, Mar 29, 2009 at 6:25 PM, Elon Musk wrote:
We looked closely at a range extender architecture for Model S. It ends up costing about the same in vehicle unit cost, a lot more in R&D and a lot more in servicing. Also, although performance is ok when both battery and engine are active at the same time, it turns really bad when the battery runs out and an undersized engine is carrying all the deadweight of the pack. Essentially, a REV is neither fish nor fowl and ends up being worse (in our opinion) than either a gasoline or pure electric vehicle.
An important consideration that people without a technical background don’t understand is that you can either have a high power or a high energy cell chemistry, but not both. Since the battery pack in a plug in hybrid like the Volt has to generate the same *power* as a much larger battery pack in a pure electric vehicle, it has to use a low energy cell chemistry.
That means a 40 mile REV pack is not 1/5 the size of a 200 mile pure EV pack, as simple proportionality would suggest. Another factor is that the REV pack is forced to do three to four times more cycles that a pure EV pack and is (obviously) hit with five times the current per cell during acceleration and regen braking, which forces the REV pack to be derated considerably.
The net result is that a 40 mile REV pack is roughly half the size of a 200 mile EV pack. On top of that, you have to add the engine, generator and all the interconnects between engine and battery. It ends up having about the same mass and worse packing efficiency than a pure EV, plus you still have to deal with all the environmental issues of a gasoline engine.
________________________________
From: Lyle Dennis
Sent: Saturday, March 28, 2009 5:35 PM
To: Elon Musk
Subject: EREV
Dear Mr Musk:
My name is Lyle Dennis, founder of GM-Volt.com and AllCarsElectric.com. I’m sorry I couldn’t be there for the unveiling but a enjoyed it from afar. As a full time neurologist finding free time is hard. I have a question or you for my site.
1) What is your feelings about the range-extender concept of the Chevy Volt and why have you not considered it it any of your products.
2) Now that weve seen the S is there a third yet lower cost Tesal in the works and for when (BlueStar)?
Thanks
Lyle J. Dennis, M.D.
