Another Iceberg, Right Ahead
Tesla Motors began to shiver in 2007. Several Tesla board
members became concerned that the CEO, Martin Eber-
hard, couldn’t control the growing company. One of the
investors in Tesla did his own cost analysis with the help of
external consultants, and he saw that the cost of producing
the first version of the Roadster had climbed from $70 000
to at least $130 000.^59 “This CEO [Eberhard] would not
admit the problems and ask for help,” a board member said.
“You must develop commitments from data and set them
in reality, not just hope it works out. We did not believe
that this registered with him, and the board felt compelled
to take action.” In a similar way as when Elon agreed to
replace himself as CEO of Zip2, Eberhard agreed to join a
board subcommittee to search for his own replacement.^196
Elon thought Eberhard had hidden these cost overruns
from the board, so Eberhard had to step down before Tesla
found his replacement. It came as a surprise to Eberhard.
“My relationship with Elon was really good until the very
last minute,” Eberhard said. “He might portray this very
differently, but he and I were on good speaking terms
until the day last August when he called me to tell me I
wasn’t CEO any more. That was totally unexpected. It was
a whack on the side of the head.”^205
In August 2007, Tesla replaced Eberhard with Michael