Tesla Co-Founder Sues CEO Elon Musk For Slander And Breach Of Contract

Tesla co-founder Martin Eberhard is suing CEO Elon Musk, citing allegations of slander, libel and breach of contract. Eberhard’s lawsuit, which is 22-pages long, was filed on May 26 in San Mateo County, Calif. Superior Court and seeks unspecified damages.

The suit surrounds Musk’s treatment of Eberhard as well as the CEO’s handling of Tesla, alleging that Musk “compromised Tesla Motors’ financial health.” Eberhard says that Musk began a smear campaign against Eberhard on media outlets, attaching pages of news articles where Musk made negative comments about Eberhard. Eberhard says Musk essentially pushed him out of the company that he founded and consequently took full credit for developing the first electric car the company produced, the Roadster.

Eberhard also claims that Musk not only falsely said that he was the founder of the company, but has also misrepresented his past roles, including the extent of his involvement with the company he founded, PayPal. The suit also says that Tesla didn’t pay him severance or issue stock options, which was part of his contract upon his separation from the company in November of 2007. Some of the accusations border on hilarity, with Eberhard accusing Tesla of destroying his customized Roadster before the car was given to him.

The lawsuit is embedded below.According to Wired’s report, Tesla calls the suit a “fictionalized account of Tesla’s early years.” Tesla has also said that they plan to counter sure Eberhard. While some of the suit seems like sour grapes, the breach of contract accusations take on a more serious tone. It’s unclear how much Eberhard is seeking in damages.

Daimler recently took a 10% (or $50 million) stake in Tesla, putting the company’s valuation at $500 million. You can see our full coverage of Tesla and Elon Musk here.

Tesla lawsuit