Earlier this month, Tesla Motors founder Martin Eberhard filed suit against the company and its current chief executive Elon Musk for slander, mismanagement and delivering him a damaged roadster after he'd been promised the second model off the assembly line. Now Musk has responded to the charges in a lengthy blog post today claiming that Eberhard did not have as much of a hand in the Tesla roadster's success as he would like the public to believe.
Eberhard's main complaint is that Musk criticized him publicly for causing wasteful and expensive delays in the roadster's development and for tanking the company's finances. Countering this allegation, Musk says that Eberhard drastically underestimated the roadster's production cost at $65,000 after the first 100 units. A study later pinned the cost at $140,000 for materials alone, Musk says.
"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," he wrote in the blog post. The company later hiked the car's price tag to $109,000 to compensate for these costs. It only recently dropped down to $80,000 now that 500 models have been delivered.
Regarding the timeline, Eberhard says that Musk demanded nit-picky details like automatic door locks and swanky design features that derailed plans to move the roadster into production by September 2007. Musk says that Eberhard had fudged the scheduling and that he faced a very different reality when he became chief executive last fall.
"As it later turned out, not a single major vehicle sub-system would be ready anywhere near [September]. Initially, not being aware of the depth of the problems at Tesla, the board and I were under the impression that it was just a matter of fixing the transmission."
Some of Musk's post didn't correspond to Eberhard's allegations. For example, he wrote that Eberhard likes to cast himself as the brain behind Tesla's technology when he really borrowed a prototype from AC Propulsion. This does vaguely echo Eberhard's barb that Musk installed himself as the company's leader when he was just an investor -- but doesn't seem that relevant to the lawsuit at hand, which many in the industry have dismissed as insignificant to begin with.
The rest of Musk's post is seemingly devoted to his personal credentials in the electric car space and as an investor in general. Establishing credibility is clearly a high priority. He even includes an email thread dating back to 2003 when he was first approached by JB Straubel and Harold Rosen about AC Propulsion.
It will be interesting to see how Eberhard responds to Musk's rebuttal. If he's not careful, this could easily devolve into nothing more than a high-profile flamewar.
[Photo credit: Bloomberg News]