Elon Musk’s Dominance Over Tesla: A Blend of Finances, Assertiveness, and Popularity

The story of Tesla and Elon Musk can be traced back to the early 2000s, when Musk was ousted as CEO of his first company, PayPal. That incident taught Musk a crucial lesson about the importance of being in control, even when it wasn’t your own company.

In episode two of Land of the Giants: The Tesla Shock Wave, we talk to Tesla’s original co-founders, Martin Eberhard and Marc Tarpenning, as well as several of the company’s earliest employees, to tell what is essentially an origin of the electric automaker — but also of Musk himself. We learn how Musk was brought on as a crucial early investor but soon used his clout, money, and even a few strong-arm tactics to oust Eberhard and Tarpenning and eventually install himself as CEO of Tesla.

“My initial impression of him was he was quite smart,” Eberhard recalls, “and quite enthusiastic.”

But those feels soon soured after Musk began to exert his authority as board chairman, pressuring Eberhard to fire people, make wildly difficult design fixes to the company’s early lineup of EVs, and then step aside as Musk positioned himself at the forefront of Tesla’s public introduction to the world.

Soon enough, Eberhard was out, and Musk was in. “It felt like a brick on the side of my head,” Eberhard said. “It’s totally unexpected.”

Eberhard sued Musk for libel, defamation, breach of contract, infliction of emotional distress, and failure to pay his wages, among other things. And while the two eventually settled, Eberhard accuses Musk of violating their non-disparagement clause — a fact he claims he’s powerless to prevent. (Musk still occasionally tweets about Eberhard to this day.)

“Although he’s been flagrantly violating that agreement over and over and over again, he’s also the richest man in the world,” he said. “And if he decides to crush me with lawsuits, I can’t survive it.”

The episode also dives into Musk’s discovery of Twitter and how he used the social media platform to create a new kind of fanbase that has endured until today. And while we know how this story ends — with Musk in ownership of Twitter, now X, for better or worse — the early days of his Twitter use are the origins of a new style of corporate management and a new era of risk for Tesla.

“What was problematic for me is that he started to become sort of high on his own supply,” veteran tech journalist Kara Swisher says in the episode. “The rich liberals are like, ‘What the fuck am I giving this guy money for?’ Dozens of my friends are like, ‘I want to get rid of my Tesla.’”