From its Autopilot software to allegations of racism at its California factory, the electric-car company has faced questions about seemingly every aspect of its business.
Tesla has missed deadlines for several vehicle launches.
Tesla is one of the most divisive companies on Wall Street.
While it's earned a passionate fanbase and a sky-high stock price, the electric-car maker and its CEO, Elon Musk, can't seem to avoid controversy.
From Musk's unfiltered tweeting to concerns about a toxic culture at its California factory, the company has faced questions about seemingly every aspect of its business. That may explain its perennially volatile stock price.
These are 15 controversies that Tesla has faced in recent years.
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A tweet about taking Tesla private
Musk and the Securities and Exchange Commission (SEC) have been at odds for years.
The agency sued Musk in September 2018 after he tweeted that he had secured the funding necessary to take Tesla private at $420 per share, alleging that Musk had misled investors about the likelihood of a go-private deal.
A few days after the lawsuit was filed, the parties settled.
Musk didn't admit or deny the allegations in the agency's lawsuit against him but had to step down as the chairman of Tesla's board of directors for three years. Musk and the company each had to pay a $20 million fine, and Tesla lawyers are required to vet any of Musk's social media posts that could be relevant to Tesla shareholders.
In the years since, the SEC has accused Musk of not following the agreement after various tweets. Musk is trying to get out of it.
Multiple drivers have been killed while using Autopilot, Tesla's advanced driver-assistance system. The fatal accidents have raised questions about Autopilot's capabilities and how intently drivers pay attention to the road when using the feature.
When switched on, Autopilot keeps a Tesla centered in its lane and maintains a set speed while keeping distance from the car ahead. It isn't autonomous, and Tesla says drivers need to keep their hands on the steering wheel and pay attention, but owners have been known to abuse the system.
More advanced versions of the software can navigate highway interchanges and automatically change lanes.
NHTSA is currently investigating incidents in which Teslas using Autopilot features crashed into stopped emergency vehicles.
There's no hard evidence that electric vehicles are more likely to catch fire than gas-powered ones, and a 2017 study from NHTSA found that the fire risks were comparable to or lower than traditional vehicles.
Musk has said the company's vehicles are less likely to catch fire than gas-powered ones.
But EV fires tend to be severe and difficult to put out. Once a vehicle's battery pack starts to overheat — from crash damage or a defect — fires can be challenging for first responders to contain. In June, a Tesla sitting in a junkyard in California ignited, requiring 4,500 gallons of water to put it out.
Drivers using Autopilot irresponsibly
Consumer Reports confirmed last year that it's possible to drive down the road using Autopilot without sitting in the driver's seat or holding the steering wheel.
Musk's aggressive promises for self-driving tech
Musk has long promised that Tesla owners would soon be able to earn passive income by deploying their cars as autonomous robotaxis, but that vision appears a long way out.
Tesla released a prototype of its Full Self-Driving software to public streets
In October 2020, Tesla released a prototype version of its so-called Full Self-Driving software for a limited number of owners to test on public streets. Today, more than 100,000 Tesla owners have the beta software.
Some safety advocates oppose the move, arguing that unleashing the experimental technology poses an unreasonable risk to other drivers, bicyclists, and pedestrians.
"They're using consumers, bystanders, other passengers, pedestrians, and bicyclists as lab rats for an experiment for which none of these people signed up," Jason Levine, executive director of the Center for Auto Safety, a consumer advocacy group, told Insider.
Indeed, since the Full Self-Driving Beta went out to customers, dozens upon dozens of video clips have popped up online of the system driving dangerously or unpredictably. It has forced drivers into oncoming traffic, nearly crashed into concrete pillars, and had close calls with pedestrians.
Workplace safety concerns
Injury statistics and reports from media outlets have raised questions about worker safety at Tesla's factories, though concerns about workplace safety are not unique to Tesla in the auto industry.
Bloomberg reported in March 2019 that workers at Tesla's auto plant in Fremont, California, spent twice as many days away from their jobs due to work-related injuries and illnesses, after adjusting for workforce growth, in 2018 than in 2017, citing a report Tesla filed with the Occupational Safety and Health Administration (OSHA).
Tesla received more citations from OSHA related to vehicle manufacturing than Ford, General Motors, or Fiat Chrysler from 2017 through the end of 2018. And reports from Reveal published in 2018 claimed that Tesla misreported workplace injuries, avoided using safety markings for aesthetic reasons, and failed to give injured employees proper medical care.
Tesla has denied that it has misreported workplace injuries and failed to use safety markings for aesthetic reasons.
Racism and sexual harassment in the workplace
Current and former Tesla employees have filed more than 40 lawsuits in the last five years alleging a work environment that fosters racism, sexism, and sexual harassment, an Insider analysis found.
The lawsuits detail a workplace where human resources regularly failed to address worker concerns about slurs and harassment. Experts told Insider the number of lawsuits should be a cause of concern for Tesla, though the company pushed back against the notion that it faces an unusual number of lawsuits.
In February, the California Department of Fair Employment and Housing sued Tesla, alleging that it discriminates against Black workers and allows racial harassment to run rampant at its Fremont, California, factory. The automaker called the lawsuit "unfair" and "misguided" in a blog post.
In February 2019, Consumer Reports pulled its recommendation of the Model 3 due to problems with door handles, loose interior trim and molding, paint defects, and cracked windows.
A Tesla representative told Insider at the time that it had fixed "the vast majority" of the Model 3 issues cited by Consumer Reports subscribers. Tesla owners continue to complain about quality issues in their new vehicles.
Former employees file whistleblower tips with the Securities and Exchange Commission
Martin Tripp, a former technician at the company's battery plant in Nevada, filed a tip that alleged that Tesla used batteries with puncture holes in vehicles meant for customers. (Tesla has denied the claim.) Tripp also claimed that the company was wasting raw materials.
Later in the year, two former security employees, Karl Hansen and Sean Gouthro, claimed that Tesla did not disclose to shareholders the theft of raw materials and the unauthorized surveillance and hacking of employee cellphones and computers at the Nevada factory, according to Meissner Associates, the law firm that represented them. (A Tesla representative denied those claims.)
Tesla has also faced allegations of retaliation against whistleblowers, some of whom claimed the company fired them for raising issues with management.
Smoking marijuana on camera
In a September 2018 interview with Joe Rogan, Musk was filmed smoking marijuana. (Recreational use of marijuana is legal in California, where the interview was filmed.)
"Weed is not helpful for productivity. There's a reason for the word 'stoned.' You just sit there like a stone on weed," Musk said.
Long wait times for repairs
Since the release of the Model 3 in 2017, customers have complained about poor communication from Tesla's service centers and long wait times for repairs. Musk has blamed third-party body shops for some of the issues, but he has acknowledged that Tesla needs to improve service quality in North America.
Tesla owns and operates its own network of service centers rather than relying on a vast network of third-party dealers. It also has a mobile service technicians that perform repairs in customers' driveways.
Missed production targets lead to investigations
While Musk said in July 2017 that it appeared Tesla could make 20,000 Model 3s per month starting in December 2017, Tesla made just 2,685 Model 3 vehicles in 2017. In 2016, Tesla said it would make 500,000 vehicles in 2018, but ended up making 254,530.
The SEC also launched an investigation into Tesla's Model 3 production predictions in 2018.
"When we started the Model 3 production ramp, we were transparent about how difficult it would be," a Tesla representative told Insider in 2018. "Ultimately, given difficulties that we did not foresee in this first-of-its-kind production ramp, it took us six months longer than we expected to meet our 5,000 unit per week guidance."
Tesla's acquisition of a struggling solar company raises questions
In 2016, Tesla acquired the solar panel company SolarCity for $2.6 billion. In the aftermath, a group of Tesla shareholders sued Musk, arguing that the move was a financially unwise bailout of a business operated by two of Musk's cousins, Peter and Lyndon Rive. Musk was the chairman of SolarCity's board of directors before Tesla purchased the company.
Musk won the lawsuit in April.
The controversy around Tesla's residential-energy business has dragged on. Tesla only began installing its Solar Roof product on homes in 2019, a delay Musk blamed on the complicated rollout of the company's Model 3 sedan.
Tesla significantly raised the price of Solar Roofs in 2021, leading to lawsuits from customers who felt blindsided by the increases.
Delays in major products
Tesla sells four vehicles: the Model S and Model 3 sedans along with the Model Y and Model X SUVs.
In recent years, Tesla has announced multiple new models that haven't seen the light of day. The Semi truck debuted in 2017 and production was supposed to start in 2019. The Roadster supercar was announced during the same event with a targeted on-sale date of 2020.
Tesla has pushed all three vehicles down the road multiple times and now says they'll go into production in 2023.
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