Lawsuit Against Tesla Dropped

by editor on Aug.19, 2009, under TechCrunch

Remember that whole sour grapes law suit filed against Tesla Motors and Elon Musk by co-founder and former CEO Martin Eberhard? According to Eberhard’s lawyer, he has dropped the suit but doesn’t give any clarification as to why Eberhard dismissed the legal action, according to the San Jose Business Journal.

We reported earlier this summer that Eberhard filed a lawsuit against Tesla and Tesla CEO Elon Musk, citing allegations of slander, libel and breach of contract. Eberhard made many outrageous accusations, alleging that Musk “compromised Tesla Motors’ financial health.” Eberhard also said that Musk began a smear campaign against Eberhard on media outlets, accusing Musk of pushing him out of the company that he founded and taking full credit for developing the first electric car the company produced, the Roadster. Eberhard also claimed that Musk not only falsely said that he was the founder of the company, but has also misrepresented his past roles, including the extent of his involvement with the company he founded, PayPal.

Tesla immediately issued a short statement when the lawsuit was filed, calling the lawsuit a “fictionalized account of Tesla’s early years.” Musk then took to Tesla’s blog to give his own lengthy and in-depth version of the messy situation, defending his education and past professional roles and his role as CEO of Tesla.

According to reports, a judge recently ruled that the lawsuit could move forward after Tesla filed a motion to dismiss in late June. Apart from the lawsuit debacle, this summer has proved to be a positive one for Tesla, which achieved profitability in July with approximately $1 million of earnings on revenue of $20 million, thanks to improved margins on its sports car, the Roadster. Tesla Motors also recently announced that the company will build a powertrain assembly facility in Palo Alto, which will also house the corporate headquarters, engineering and R&D departments.

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