Tesla Inc. is known for spearheading the effort of making electric cars widely available to the public. The company is also known for its chief executive Elon Musk, who has received criticism for multiple things over the years, most recently his marijuana-friendly behavior on the Joe Rogan Experience podcast.
In terms of legality however, a former employee decided to add to Tesla’s troubles by filing a lawsuit against the company…
Tesla Motors, now known as Tesla Inc., was founded in 2003 in Palo Alto, California. The company specializes in electric cars, specialist batteries, and efficient energy storage. Along with the company’s founders Martin Eberhard and Marc Tarpenning, the current CEO, Elon Musk, has a vision of offering affordable electric cars of the future to the general public.
Martin Tripp used to love his job at Tesla. Working as a process technician on a wage of just $28 per hour, it may not have been the best-paying job in the world but Tripp was content for a while. But after he left the company, he made some shocking allegations that would lead to lawsuits and counter-lawsuits.
The allegations got even more serious when Tripp alleged that Tesla was neglecting its mission to improve the environment, leaving “large quantities of waste and ‘scrap’ vehicle parts lying haphazardly on the ground inside the Gigafactory,” according to Business Insider (BI). He also claimed that the car giant reused battery parts which had been discarded as waste on a regular basis.
Tripp, who was sued by the company for leaking sensitive information to the media, recently made a counter-claim against Tesla. Tripp claims that punctured battery cells were revamped with glue and simply put back on the manufacturing line. Such allegations, if found true, could take a company the size of Tesla from hero to zero overnight.
After Tripp became the proverbial whistleblower on Tesla, according to The Washington Post, a bitter email exchange ensued between him and Musk. While Tripp denies ever threatening violence against the company or its employees, calling those claims “absurd!” the emails are more than just a little heated. But the Storey County sheriff’s office wasn’t taking any chances having received information of a threat to security at the Gigafactory.
No Credible Threat
Having investigated the matter as best they could in a short time, the sheriff’s office concluded that there was no threat to the facility. “After several hours of investigation … there was no credible threat,” Sheriff Gerald Antinoro said. Nevertheless, he advised Tesla to bolster their security detail just in case. But it’s the public way in which Musk allowed this case to unfold which has many people concerned.
As well as calling Tripp a “horrible human being” who should be “ashamed” of himself in emails back and forth, Musk also threatened him with “legal penalties.” This referred to the lawsuit Musk initiated against the former employee, accusing him of hacking the company’s computer systems. As well as accusing him of leaking photos and videos of Tesla’s manufacturing systems, the suit also accuses him of giving false information to journalists and being generally “disruptive and combative” in the workplace.
Nuts and Bolts
According to the internal documents leaked by Tripp to BI, up to 40 percent of raw materials used to make batteries and driving units made at the Gigafactory were reworked by employees. That means that, allegedly, scrap parts were used in the company’s Model 3s cars. Essentially the claim is that for every 2,500 new battery packs made, an additional 1,000 pieces of “nonconforming material” were also included in the mix.
After allegations were brought to Tesla claiming they spent $150 million on scrap materials this year alone, they claimed that figure was an overstatement. “As is expected with any new manufacturing process, we had high scrap rates earlier in the Model 3 ramp. This is something we planned for and is a normal part of a production ramp,” they said to BI.
Decreased Scrap Rate
According to the official Tesla statement regarding this: “Indeed, we have always explained that Model 3 margins would increase after costs begin to fall from elevated scrap and other early ramp issues — and they have. Our scrap rate for batteries has decreased by almost 60% since January as we have improved our manufacturing processes.” They wrote. “It’s also important to remember the reason we scrap parts: because we want to ensure that only the highest quality parts are used to create the best vehicles for our customers. This is a part of the reason why Tesla’s customer-satisfaction scores for Model 3 vehicle quality and condition are at an all-time high of 93%.”
Rebecca Lindland, a senior director at Kelley Blue Book, also spoke to the publication, sharing her concerns about investing in Tesla.”That seems like just an awful lot of money,” she said. “As an investor, I’d ask: Is this a good use of my funds? And what kind of transparency is going on here?” But Tesla claims they have overcome their issues with production, aiming to increase it greatly in the coming months.
Even Musk himself referred to “Production Hell” inside the Gigafactory. But according to the allegations, a misprogrammed robot that handles batteries was making holes through plastic housing and entering some of the cells. But instead of scrapping the now-faulty parts, the employee claims Tesla went ahead and simply patched them up; sometimes with glue and other materials.
Again, Tesla refuted these unproven allegations in a statement to Business Insider. They claim they use best practices and that they never used any punctured batteries in the production of their cars. Tesla said the same about the allegations that they used a wrongly mixed adhesive in the production of the Model 3s.
Dozens of photographs taken by Tripp show scrap materials piled high at the Gigafactory in Nevada. These materials include flammable material used to make lithium batteries. A source told reporters from the same publication that those batteries present a serious health hazard to employees at the site as they are connected. However, Tesla, once again, refuted that allegation claiming that “all non-conforming materials are kept in a temperature-controlled room, and that they pose no safety threat.”
Seeking $1 million
Tripp, who said he had to relocate as a result of his claim against Tesla, also said he has experienced health problems such as anxiety and has had trouble sleeping. For all that he claims he has been through, the former Tesla employee is seeking a tidy $1 million in punitive damages. This suggests to some people that Tripp is “in it to win it” and is all about the money.
As far as Tripp’s attorney, Robert D. Mitchell is concerned, “Our client, Martin Tripp, has been wronged by Tesla in more ways than one,” according to The Verge. The attorney claims that Tesla made “several bewildering allegations against Mr. Tripp.” And that’s the reason Tripp has decided to fight back. “In an effort to restore his name, Mr. Tripp has decided to fight back against Tesla’s allegations, and we are privileged to aid him in his fight,” Mitchell concluded.
Tesla is more than a little disturbed by the serious allegations of malpractice leveled against them. A few weeks after the revelations were made public by the media, Musk fired a bunch of tweets over to journalist Linette Lopez from BI. They said that Lopez “published several false articles about Tesla” and asked her if she “compensated or promised to compensate Martin Tripp for inside information about Tesla.”
Naturally, Tripp countered any claims of wrongdoing on his part, claiming he “has never received any compensation from Ms. Lopez, nor has Ms. Lopez ever offered him any compensation or promise of compensation.” Moreover, Tripp claims Tesla made “false allegations” which he considered to be “defamatory and published with negligence.”
Tripp’s attorney also claimed that “Tesla has used strong-arm tactics and a defamatory smear campaign in an effort to bury the disconcerting information Martin Tripp learned as a Tesla employee and to discredit Mr. Tripp before the general public.” Mitchell also said his client is looking forward to defending himself. “By filing its lawsuit against Mr. Tripp, Tesla has now forced the issues to the forefront, and Mr. Tripp looks forward to defending himself before a jury of his peers by showing that what he witnessed and repeatedly reported at Tesla is, in fact, true.” He said.
To sum the situation up, Lindland from Kelley Blue Book concluded “If he’s going to be an auto manufacturer, he has to be held to auto-manufacturing standards. If Honda or GM had these kinds of scrappage rates or waste, Wall Street wouldn’t stand for that. … Nobody would be saying, ‘You’re just a hater.'” It remains to be seen what the outcome of this bitter dispute will be as both sides prepare to defend their positions.