Chapter 51

Chapter 52: Starlink: SpaceX, 2015–2018

Overview

After learning of cost overruns and production issues at Tesla, Musk engineers Martin Eberhard's ouster as CEO in August 2007, then cycles through two interim CEOs—Michael Marks and Ze'ev Drori—before finally taking the role himself in October 2008. The chapter documents Musk's difficulty sharing power and his contentious relationship with Eberhard, which escalates into a lawsuit and decades of acrimony.

Summary

Eberhard initiates his own departure by proposing a CEO search to Musk, who initially appears supportive. However, after consultants Gracias and Watkins report serious cost overruns in July 2007, Musk's attitude hardens. At an August board meeting, Musk interrogates Eberhard about car costs, concludes he is lying about pricing, and orchestrates his immediate ouster while Eberhard is traveling to Los Angeles. Despite Eberhard's expectation of a gradual transition, the board votes him out unanimously, and co-founder Marc Tarpenning also departs. Eberhard vents his grievances on a blog; Tesla's lawyers threaten his stock options to silence him. The conflict escalates into a 2008 libel lawsuit and eventually an uneasy 2009 settlement establishing both men as cofounders, though Musk repeatedly violates the no-disparagement clause in subsequent years with inflammatory tweets and statements.

Musk then appoints Michael Marks, former CEO of Flextronics, as interim CEO. Marks clashes with Musk over cash flow management, canceling supply orders for unrealistic production schedules, and criticizes Musk's harsh, intimidating management style. Marks advocates for outsourcing vehicle assembly to an established automaker, which Musk rejects as contrary to his vision of vertically integrated Gigafactories. After Musk dismisses his ideas as "the stupidest thing I've ever heard," Marks departs. Marks later reflects that Musk's abrasiveness may be inseparable from his drive to succeed, comparing him to Steve Jobs.

Musk then recruits Ze'ev Drori, a former Israeli paratroop officer and semiconductor entrepreneur, as CEO. Drori proves unfamiliar with automotive manufacturing, and senior executives including JB Straubel pressure Musk to assume control. In October 2008, Musk becomes Tesla's official CEO, his fourth in roughly one year, declaring he needs "both hands on the steering wheel."

Characters

  • Martin EberhardTesla's founder and original CEO; ousted by Musk in August 2007 over alleged cost misstatements; later sues for libel and reaches a settlement establishing him as cofounder
  • Elon MuskSpaceX CEO who orchestrates Eberhard's removal, cycles through interim CEOs, and ultimately assumes Tesla's CEO role himself in October 2008
  • Michael MarksInterim CEO recruited from Flextronics; clashes with Musk over supply chain management and manufacturing strategy before departing
  • Ze'ev DroriIsraeli entrepreneur and combat veteran brought in as CEO; lacks automotive expertise and steps aside after a few months
  • Marc TarpenningTesla co-founder who departs shortly after Eberhard's ouster and defends him against Musk's lying accusation
  • JB StraubelSenior Tesla executive who leads a delegation pressing Musk to take over as CEO from Drori
  • GraciasConsultant who reports cost overruns at Tesla, precipitating Eberhard's ouster
  • WatkinsConsultant who reports cost overruns at Tesla alongside Gracias
  • Ira EhrenpreisBoard member who helps convince Musk to take over as CEO from Drori