Ask anyone on the street who started Tesla, and nine times out of ten, they’ll say Elon Musk. It’s a natural assumption. He’s the face of the brand, the voice on X, and the guy who seemingly wills the Cybertruck into existence. But if you look at the original incorporation papers filed in July 2003, you won’t find Musk’s name anywhere on them.
The story of the founders of tesla is actually a messy, fascinating drama filled with lawsuits, silicon valley power plays, and a legal settlement that literally changed the definition of the word "founder."
Basically, the company wasn't born in a SpaceX hangar or a futuristic design studio. It started in the minds of two engineers, Martin Eberhard and Marc Tarpenning, who wanted to prove that electric cars didn't have to be glorified golf carts. They were the ones who sat in a San Carlos office, dreaming of a high-performance sports car powered by the same lithium-ion batteries found in laptops.
The Original Duo: Eberhard and Tarpenning
Martin Eberhard and Marc Tarpenning weren't new to the startup game. They had already found success with NuvoMedia, the company that created the Rocket eBook (one of the first e-readers). After selling that for nearly $200 million, they were looking for a new challenge.
Eberhard, a self-described "car guy," was frustrated. He wanted a sports car that wasn't a gas guzzler. When he saw the AC Propulsion tzero—a kit car that could do 0-60 in under four seconds on electric power—a lightbulb went off. He realized that battery technology had finally caught up to automotive needs.
On July 1, 2003, they incorporated Tesla Motors.
Eberhard took the CEO role, and Tarpenning became the CFO and VP of Electrical Engineering. They spent those early months in "stealth mode," refining the business plan and looking for a way to shoehorn thousands of small battery cells into a car chassis without it exploding. Honestly, people thought they were crazy. The EV market was dead, and General Motors had just finished crushing its own EV1 program.
How Elon Musk Entered the Frame
By 2004, the "two-man show" needed serious cash. They weren't just building a gadget; they were building a car company, which is essentially a giant furnace for burning money.
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They met Elon Musk at a Mars Society meeting. At the time, Musk was fresh off the PayPal sale and was already pouring his fortune into SpaceX. He liked the idea of a high-performance EV. He didn't just like it—he invested $6.5 million of the $7.5 million Series A round.
This investment gave Musk the title of Chairman of the Board.
Now, here’s where the nuance kicks in. While Musk wasn't there on day one of incorporation, he wasn't just a passive "money guy" either. He was deeply involved in the design of the Roadster. He pushed for the carbon-fiber body. He obsessed over the headlights. He even insisted on a more comfortable seat design.
The Five-Man Settlement
As the years went on, the relationship between Eberhard and Musk soured. The Roadster was delayed. Costs were spiraling out of control. In 2007, the board—led by Musk—voted Eberhard out as CEO.
It got ugly.
Eberhard eventually sued Musk for libel and slander, claiming Musk was trying to rewrite history to erase the original founders. This leads us to the most bizarre part of the founders of tesla history. In 2009, a lawsuit settlement was reached. The terms were confidential, but the public result was clear:
Five individuals were officially allowed to call themselves co-founders:
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- Martin Eberhard: The original visionary and first CEO.
- Marc Tarpenning: The engineering and financial backbone of the early days.
- Elon Musk: The lead investor who transformed the company's design and scale.
- Ian Wright: The third employee who joined a few months after incorporation.
- JB Straubel: The technical genius who met Musk separately and was folded into the team as employee number five.
Why JB Straubel and Ian Wright Matter
We often skip over the other two names, but they were critical.
Ian Wright was a New Zealander who lived next door to Eberhard. He brought a deep understanding of electric powertrains and was instrumental in the very first months. He didn't stay long, leaving in 2004 to start his own EV venture, Wrightspeed.
JB Straubel, on the other hand, is arguably the most important person in Tesla's history after Musk. He was the Chief Technology Officer for 15 years. While the others were arguing over titles, Straubel was the one making sure the batteries actually worked. He's the guy who pioneered the Supercharger network and the Gigafactory concept.
Musk himself has said that if he hadn't had lunch with Straubel in 2003, Tesla might not exist today.
What Happened to the "Original" Founders?
It’s easy to feel a bit bad for Eberhard and Tarpenning. They started the fire, but someone else became the sun.
Martin Eberhard spent years in the wilderness of the EV world, working for companies like Volkswagen and later starting a battery tech firm called InEVit. He’s often surfaced in interviews over the last decade, sometimes sounding a bit bitter, sometimes sounding like a proud father whose kid was adopted by a billionaire.
Marc Tarpenning stayed at Tesla until 2008, long enough to see the Roadster through its launch. He’s since moved into venture capital, focusing on sustainability. Unlike Eberhard, he’s stayed mostly out of the public legal spats.
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The Reality of "Founding"
In the world of Silicon Valley, "founding" a company is often treated as a singular event—a "Eureka" moment in a garage. But the reality is that companies are built in stages.
Eberhard and Tarpenning founded the legal entity and the core idea. Musk founded the brand and the massive industrial machine it became. Straubel founded the technology that made it viable.
If you're trying to win a trivia night, the answer to who are the founders of tesla is five people. If you're talking about who signed the initial paperwork, it's two.
Actionable Insights for Future Founders
If you're looking at this history and thinking about your own startup, there are a few hard lessons to take away:
- Documentation is Destiny: If you bring in a major investor who wants a "founder" title, have that conversation early. It saves years of legal fees.
- The "Money" Isn't Just Money: When Musk invested, he brought a level of intensity and a "Master Plan" that the original duo simply didn't have. If you take big VC money, expect the culture to change.
- Narrative Control: Musk is the "founder" in the public eye because he stayed. He survived the "Valley of Death" in 2008 when the company almost went bankrupt. In business history, the people who finish the race usually get to write the story of how it started.
Tesla wouldn't be a household name without Elon Musk. But it also wouldn't exist without a quiet e-reader entrepreneur named Martin Eberhard who just wanted a cool electric car to drive to lunch.
Verify your startup's operating agreement and ensure all "founder" designations are legally binding to avoid future title disputes during high-growth phases.