You probably think of Elon Musk when you see a Tesla silently glide past you at a stoplight. It’s a natural reflex. He’s the face, the voice, and the chaotic energy behind the brand. But honestly, if we’re talking about who actually sat down in a room in 2003 and decided to start a car company named after an eccentric Serbian inventor, it wasn’t Musk. It was two guys named Martin Eberhard and Marc Tarpenning.
They weren't "car guys" in the traditional sense. They were Silicon Valley engineers who had just made a killing selling an e-reader company called NuvoMedia for $187 million. They had money, they had time, and Eberhard really wanted a sports car that didn't make him feel like he was personally melting the ice caps.
The Idea That No One Wanted to Buy
Basically, Eberhard and Tarpenning realized that people who bought high-end sports cars were also the kind of people who liked to show off how "green" they were. They saw people driving Toyota Priuses but wishing they were driving Porsches. The "Aha!" moment was simple: Why not use lithium-ion batteries—the same stuff in your laptop—to power a car?
People thought they were nuts.
At the time, electric cars were basically glorified golf carts. They were slow, ugly, and had the range of a cordless vacuum. Eberhard and Tarpenning incorporated Tesla Motors on July 1, 2003. They spent months pitching the idea to VCs who laughed them out of the room. They weren't just asking for money; they were asking for permission to fight the entire global auto industry.
✨ Don't miss: World War One Barbed Wire: Why a Simple Fence Changed Modern Warfare Forever
Then they met Elon.
Musk was already rich from PayPal and was busy playing with rockets at SpaceX. He shared their weird obsession with space and sustainability. In 2004, he led the Series A funding with a $6.35 million investment. He became Chairman of the Board, but Eberhard was the CEO. Tarpenning was the CFO and VP of Electrical Engineering. For a while, the arrangement actually worked.
Where It All Started to Break
Things got messy during the development of the Tesla Roadster.
Building a car is hard. Building a brand-new electric car using a Lotus Elise chassis while trying to invent a proprietary battery management system is significantly harder. By 2007, the Roadster was way behind schedule and the costs were spiraling. Musk, who was the primary financier, started getting agitated.
🔗 Read more: Cómo se llama esa canción: Por qué tu cerebro olvida y cómo encontrarla hoy mismo
There’s this famous story about Eberhard being "voted off the island." In August 2007, while Eberhard was in a meeting, he got a call from Musk. The board had decided to replace him as CEO. It wasn't a clean break. He was demoted to "President of Technology," a title that basically meant "please stay in the corner while we fix this." By early 2008, both he and Tarpenning were gone.
The aftermath was a legal bloodbath. Eberhard sued Musk in 2009 for libel and slander, claiming Musk was trying to rewrite history to make himself the "sole" founder.
"I was essentially erased from the company I started," Eberhard later lamented.
The suit was settled out of court. The most interesting part? The settlement legally allowed five people to call themselves "co-founders": Eberhard, Tarpenning, J.B. Straubel, Ian Wright, and Musk. It was a diplomatic solution to a very personal war.
Life After the "Elon Era"
So, what happened to the guys who actually started the fire?
Marc Tarpenning has stayed relatively low-key. He’s currently a Venture Partner at Spero Ventures, where he helps other "mission-driven" founders build things. He’s the guy you want in your corner if you’re trying to solve a hard engineering problem without the Twitter (now X) drama. He’s often said he’s proud of what Tesla became, even if he wasn't there to see the Model 3 roll off the line.
Martin Eberhard’s path was a bit more winding. He spent time at Volkswagen, worked with a battery startup called InEVit (which was later bought by SF Motors), and continues to be a vocal critic of how Tesla is run. He’s the "purist." For him, it was always about the engineering and the environment, not necessarily the cult of personality.
✨ Don't miss: Dolphin EasyReader: What Most People Get Wrong About Accessible Reading
Why Marc Tarpenning and Martin Eberhard Still Matter in 2026
In 2026, Tesla is a monster. It’s pivoting toward AI, robotaxis, and humanoid robots like Optimus. The company is worlds away from the little garage in San Carlos where two guys were tearing apart laptop batteries to see if they’d explode.
But here’s the thing: The Master Plan that Musk gets all the credit for? The "start with a sports car, then a luxury sedan, then a mass-market car" strategy? That was largely the blueprint Eberhard and Tarpenning laid out in the original business plan.
They proved that an electric car could be sexy. They proved that lithium-ion was the future. Without their initial push, we might still be waiting for a "real" electric car that isn't a hobbyist project.
Actionable Takeaways for Founders
- Documentation is King: If you're a founder, make sure your roles and "founder status" are legally airtight from day one. Handshakes don't hold up in court when billions are on the line.
- The Power of the Pivot: Eberhard and Tarpenning realized they couldn't build a car from scratch, so they partnered with Lotus. Use existing infrastructure to prove your core tech.
- Manage Your Investors: Musk wasn't just a "check." He was a force. Understand that when you take massive amounts of capital from a dominant personality, the "founder" title becomes a fluid concept.
If you want to understand the true DNA of the EV revolution, look past the rockets and the tweets. The real story started with two guys who just wanted a cool car that didn't kill the planet.
Next Steps for You: Check out the original 2006 "Tesla Founders Blog" archives (if you can find them via the WayBack Machine) to see how the tone of the company shifted once the Silicon Valley engineers were replaced by the "Technoking" era. It’s a masterclass in how brand voice can be completely overhauled.