Eberhard's interest in sports cars, concern about the dependence on oil imports, and
global warming led him to think about EV cars as part of the solution. Their development of the second generation of
NuvoMedia's ebook reader also had an impact due to their experience in sourcing lithium ion cell technology.
[9] Eberhard found out about and attempted to purchase a prototype EV sports car called the
AC Propulsion tzero. He provided some financial and technical support in the conversion of the tzero to lithium-ion batteries. Eberhard then tried to convince
AC Propulsion founder
Alan Cocconi to turn the tzero into a production car.
[10][11] When Cocconi declined, Eberhard co-founded (with
Marc Tarpenning), and became the first CEO of Tesla Motors, an electric car company in
Menlo Park, California in 2003.
Eberhard and Tarpenning had observed a common sight in the driveways of the wealthy suburb of Palo Alto, California: a conspicuously efficient Prius parked next to a high-end sportscar or luxury car such as a Porsche, a BMW or a Lexus.
[12] They saw that affluent buyers of high-end cars were displaying their green virtue (now called
conspicuous conservation) with a Prius, but still wanting the driving experience and prestige of a high-end car. Eberhard and Tarpenning realized that these affluent, environmentally motivated buyers were a perfect market for a performance oriented electric car, and that such a car would change the market perception of what an electric car could be.
Eberhard’s guiding principles were:
[13]
1) An electric car should not be a compromise. With the right technology choices, it is possible to build electric cars that are actually better cars than their competition.
2) Battery technology is key to a successful electric car. Lithium ion batteries are not only suitable of automotive use; they are game-changing, making decent driving range a reality.
3) If designed right, electric cars can appeal to even the most serious car enthusiast, as electric drive is capable of seriously outperforming internal combustion engines.
Eberhard drives the second of Tesla Motors Founder's Series Roadsters cars, which is the first series of the
Tesla Roadster (2008).
[14] The Tesla Roadster is a
battery electric sportscar with 244 miles (393 km) (EPA) range.
. 
