What's up guys and welcome back to wall street millennial on this channel, we cover everything related to stocks and investing as the founder of private space exploration, company spacex and long-time techno king of tesla. Elon musk's reputation speaks for itself and he is perhaps the most influential business leader of our time. He undoubtedly deserves credit for building tesla into the most valuable automobile company in the world, which is on track to deliver over 1 million electric vehicles this year. But there is some controversy about its exact role in tesla's early days.

Musk has long been the face of the company having been the ceo since before the company's 2010 ipo, but he technically didn't found it. It was founded in 2003 by two engineers by the names of martin everhard and mark tarpening. In the beginning, eberhard was a ceo. Musk became involved one year later in 2004 and didn't become the ceo until four years after that, the original two founders have long since left the company and for more than a decade, tesla has been run by musk, but this transition did not happen amicably.

In a 2019 interview, eberhard expressed frustration at musk, calling himself tesla's co-founder a title that he believes only belongs to himself and mark tarpony. Well, i mean this is one thing that i found kind of kind of fascinating about him is that you know he's actually accomplished some amazing things in his own right he's totally amazing. Yeah spacex is amazing, and you know he's done some interesting things with tesla for sure. I'm not sure why he has to also say that he was a founder when he wasn't.

I don't understand that oh yeah, whatever the dislike between the two men, appears to be mutual with elon musk recently saying that his single largest regret by far was getting involved with martin everhard. By far the worst decision i've ever made is is not just starting tesla with jb that that that's number one by far there's a lot of confusion. Tesla um tesla did not exist in any tesla was a shell company with no employees, uh, no intellectual property. When i invested, but the a false narrative has been created by um, one of the other co-founders uh, martin everhard and ultimately, the creation of that company uh was was done by uh jv and me um and unfortunately there's a somewhere else and another co-founder who has Made it his life's mission to make it sound like he created the company, which is false, musk and eberhard tell very different stories about the early days of tesla, but there are three sides to every story: the one side, the other side and then the truth.

In this video we'll take a deep dive into the founding story of tesla and see who really deserves to call themselves. Founder tesla was officially incorporated in the summer of 2003 by two california-based engineers, martin eberhard and mark tarponing. In the late 1990s, the two of them developed the rocket e-book, the first internet-connected e-book to ever hit the market they sold their company at the height of the tech bubble in 2000, probably for a handsome chunk of change. So now the two men had a boatload of both cash and free time, so they decided to make an electric vehicle startup, specifically, they wanted to produce a high performance.

Electric sports, car and hence tesla, was born from their development of the rocky ebook. Both men had experience with lithium-ion batteries and thought that they would be better suited to electric vehicles than the lead acid batteries used in the past. The problem is building an automobile company takes a lot of capital investment while they had some money from the sale of their previous company. This wasn't nearly enough.

They went around to various venture capital investors in silicon valley, but every single one of them said that they were crazy and showed them the door at the time most people thought of electric vehicles as golf carts. The idea of making a high performance car that runs on battery power seemed like a joke, but there was one investor who was crazy enough to go along with the idea: elon musk. He was flush with cash. After selling his stake in paypal and had long been interested in sustainable energy.

He thought the idea of an electric sports car might just work. In 2004, he invested six and a half million dollars to become the majority shareholder and also became chairman of the board of directors. Just a few months later, an engineer by the name of jb strawbell came on as a company's first chief technology officer. This is where the first part of the controversy came in musk and saw bill came on the board about one year after the company was founded because of this eberhard believes that they should not be considered as co-founders.

But it's hard to say when the company was actually born. It was technically incorporated in 2003, but because of the two original founders lack of funds, they had no employees, no patents and no real prospect of success. It was little more than an idea. It wasn't until elon musk's funding that the company started operating in any significant capacity.

Even after musk became chairman eberhard remained ceo and was in charge of the company's day-to-day operations. But musk was deeply involved with the engineering and design of the roadster and jb straubel was very involved with the development of their battery technology. Through the first four years of tesla's existence, they had zero revenue and worth thus burning cash. Musk funded the majority of this cash burn by supplying 70 million dollars of his own money to the company.

By the time they delivered their first car in 2006, they had finished the design of their roadster and showcase it to the public to great fanfare. But prototypes are easy. Production is hard. They plan to sell the car for 109 000, but it proved very difficult to produce the car for this price because their volume was so low.

They didn't get any bulk discounts for any of the components such as handles, steering, wheels, airbags, etc. Also, with only one small assembly plant, they didn't have anything close to economies of scale. Eberhard was in charge of managing a supply chain and getting the total production costs below the 109 000 purchase price. He said that everything was going fine and the roadster was on track to being profitable.

Musk was suspicious of these claims, so he hired an independent investigator to check things out for himself. The investigators said that eberhard was misleading the board about the cost and the production costs were more than double what he claimed. Musk was furious. He thought that eberhard was intentionally misleading the board and the public about his out of control production costs and that this recklessness threatened.

The survival of the company as chairman musk, called together a board meeting where they decided that eberhard had to go in a unanimous decision and just like that, everhard was fired from the company that he founded the other founder mark. Tarponing left voluntarily. Shortly thereafter, two other men briefly held the ceo position until musk took over in 2008 right after the roadster began production after taking over as ceo musk led development of the models, s x, 3 y semi truck and cyber truck when he took over the company. He had only delivered about 1 000 cars in 2021.

They delivered almost 1 million cars for 1 000 fold in greece. After being fired, eberhard sued tesla saying that his firing was improper. He said that he was not given a severance payment, as promised and also complained that musk falsely portrayed himself as the founder of tesla to steal credit musk, almost immediately fired back. He said that tesla was little more than a concept before he got involved and eberhard's leadership, as ceo was so bad that probably created negative value after his firing.

Almost every part of the roadster had to be redesigned because the original design was unworkable. He also said that the supply chain that eberhard set up was a complete mess. Parts were ordered all the way from asia, incurring tens of millions in shipping costs and taking six months, which rendered it economically and feasible. They had to rebuild the supply chain almost from scratch before production began in the end, tesla and eberhard settled out of court for an undisclosed amount of money and musk won the legal right to call himself a co-founder.

Despite coming to a legal settlement, the two of them were never able to completely bury the hatchet. Almost 10 years later, musk was still litigating. The early days of tesla on twitter, he said quote: i wished i had never met eberhard and he is the worst person. I've ever worked with once the board was presented with evidence of eberhard's deception, fraud and the dire state of the company all board members, including those he appointed, voted unanimously to fire him in august of 2007.

Unquote, there's at least some truth in both men's claims. Martin everhard and mark tarpening were technically the only founders of tesla. They came up with the idea and incorporated the company, but musk was supporting the company from the very beginning. He supplied capital to get their operations up and running important just about every last penny that he had to get the company through the 2008 recession.

He steered tesla through production hell with the model 3 and made it into the world's most valuable automobile company. Most would agree that musk contributed a lot more to tesla's. Success than eberhard did both financially and operationally, and this is reflected in the two men's current ownership stakes with his 20 stake in tesla musk is the world's richest man with a net worth of 268 billion dollars, while eberhard still has some shares. His founding stake was diluted substantially over the years and he currently has less than 1 billion dollars.

Alright, guys that wraps it up for this video. What do you think about tesla's early days? Is it fair for elon musk to call himself a co-founder? Let us know, in the comments section below also don't forget, to open an account with moomoo and get up to five free stocks, valued at up to seventeen thousand dollars, use the link in the description below, as always. Thank you so much for watching and we'll see in the next one wall, street millennial signing out.