Criticism of Tesla, Inc.

SolarCity buyout

The so-described "SolarCity debacle"[2] led a group of Tesla shareholders to file a lawsuit alleging Musk breached his fiduciary duties and unjustly enriched himself in Tesla's buyout of SolarCity in 2016.[3] The shareholders claim that Musk knew SolarCity was going broke before the buyout,[4] that Musk failed to properly recuse himself from the deal-making process,[5] and that the deal was, in effect, a bailout of Musk's cousins Peter and Lyndon Rive.[6] In order to gain shareholder support for the buyout, Musk unveiled the Solar Roof in October 2016, but the Solar Roof tiles that Musk displayed were later revealed to be fake.[7] The trial was held in July 2021.[8] The court ruled in Musk's favor in April 2022.[9] Some lawyers and legal academics criticized the ruling as a mistake and vulnerable to appeal.[10] In June 2023, Delaware's Supreme Court upheld the ruling.[11]

"Funding secured"

In September 2018, the U.S. Securities and Exchange Commission (SEC) charged Musk with securities fraud for his "false and misleading" statements after tweeting that he had "funding secured" to take Tesla private.[12] The SEC also charged Tesla with failing to have adequate controls and procedures in place regarding Musk's tweets.[13]

Musk settled the fraud charges with the SEC in 2018, agreeing to pay a $20 million fine and stepping down as Tesla's chairman.[14] Tesla also agreed to pay a $20 million fine and put in place additional controls to oversee Musk's communications.[13]

According to The Wall Street Journal, the SEC told Tesla in May 2020 that the company had failed "to enforce these procedures and controls despite repeated violations by Mr. Musk".[15] A lawsuit filed in March 2021 alleges that Musk violated his fiduciary duty to Tesla by continuing to send "erratic" tweets in violation of the SEC settlement, and that the board has failed to control Musk.[16][17] On April 1, 2022, a federal judge ruled that Musk "recklessly made the [2018] statements with knowledge as to their falsity".[18] Comments made by Musk later in April 2022 disputing the factual basis of his settlement with the SEC likely violated the terms of the settlement agreement.[19][20]

Accounting

In 2017, a lawsuit alleged Tesla made materially false and misleading statements regarding its preparedness to produce Model 3 cars.[21] The U.S. Department of Justice also began an investigation in 2018 into whether Tesla misled investors and misstated production figures about the Model 3.[22] The lawsuit was dismissed in Tesla's favor in March 2019.[23]

In 2018 Francine McKenna, investigative journalist and lecturer in accounting at Wharton, claimed Tesla made use of new revenue recognition accounting rules (adopted 1 January 2018) to post a first-quarter revenue beat. The new rules allow cars leased through its leasing partners to generally qualify to be accounted for as sales with a right of return, rather than operating leases, allowing an accelerating recording of revenue for Tesla.[24] In May 2018, Tesla reported a final adjustment of $623 million to its cumulative earnings resulting from the revenue recognition change.

In November 2019, hedge fund manager David Einhorn accused Elon Musk of "significant fraud"[25] and in April 2020, questioned Tesla's accounting, in particular their large accounts receivable balance.[26] Musk responded on X (formerly Twitter) to Einhorn's claims with a kissing-face emoji and attached a letter signed "Treelon Musk" containing "...It is understandable you wish to save face with your investors ... [and] desire to feel somehow relevant with your Tesla short position." In the same letter, Musk promised to send Einhorn "a small gift of short shorts". Einhorn later received a package of shorts from Musk but Einhorn noted they came with "some manufacturing defects".[27] Later, in 2020, numerous reporters and financial analysts speculated that Tesla could be the next Wirecard scandal.[28][29][30]

The SEC received a whistleblower complaint in 2021 from former Tesla employee Lukasz Krupski[31] detailing numerous allegations that Tesla "may have violated securities law and flouted accounting standards." The SEC looked at one portion of the complaint, then closed the investigation without interviewing the submitters or evaluating the 18,000 files of documentation.[32] As reported first by Handelsblatt, Krupski then leaked the so-called Tesla Files, leading to court injunctions and warnings from the corporation.[33] Krupski received the 2023 Blueprint Europe Whistleblowing Prize for his work.[34][35] The Tesla Files, a book by Sönke Iwersen and Michael Verfürden based on the material uncovered by Krupski, was published on 24 July 2025 by Penguin Michael Joseph.[36]

In August 2023, Tesla's Chief Financial Officer Zach Kirkhorn resigned unexpectedly. Dan Ives, a tech analyst at Wedbush Securities, speculated about various scenarios in which Kirkhorn might have left amicably, but also speculated about one possible scenario where Kirkhorn may have left due to a disagreement with Musk over "some aspect of strategy or succession".[37]

Autopilot and Full Self-Driving fraud

As of October 2022, Tesla is facing a criminal probe from the US Department of Justice over claims it has made about its "Full Self-Driving" driver-assist system or capability.[38][39] Critics call out the company for selling and promoting its so-called Full Self-Driving (FSD) beta add-on when the software requires drivers' constant supervision and is not actually capable of full self-driving.[40][41] Tesla's Full Self-Driving beta is generally considered a SAE Level 2 advanced driver-assistance system, similar to competitors' offerings such as General Motors' Super Cruise and Ford's Co-Pilot360.[42] Legal scholars William Widen and Philip Koopman argue that Tesla has misrepresented FSD beta as SAE level 2 in order to "avoid regulatory oversight and permitting processes required of more highly automated vehicles."[43] They argue that FSD beta should actually be considered a SAE level 4 technology, and have urged state Departments of Transportation in the U.S. to classify it as such, because publicly available videos show that "beta test drivers operate their vehicles as if to validate SAE Level 4 (high driving automation) features, often revealing dramatically risky situations created by use of the vehicles in this manner."[43]

Tesla has benefited from increased sales and profit margins due to sales of the FSD option in particular, priced at $15,000 as of September 2022.[44][45] In April 2019, when Tesla was low on capital, Musk announced that Tesla would have one million robotaxis on the road by the end of 2020; a few weeks later Tesla sold stock to raise an additional $3 billion, solving its cash troubles.[44]

Elon Musk has repeatedly claimed that Tesla vehicles will be capable of full autonomy in the near future, but a Freedom of Information Act request made by PlainSite revealed that Tesla told the California Department of Motor Vehicles (DMV) in December 2020 they "do not expect significant enhancements" to the Full Self-Driving software that would enable full self-driving.[41][46] In May 2021, the California DMV said it was investigating whether Tesla violated state regulations by misleading customers in its claims about "full self-driving".[47] Bryant Walker Smith, an autonomous vehicle law expert at the University of South Carolina, said "it's so obviously clear that there's a contradiction" between what Tesla is saying in its marketing of Full Self-Driving versus what its lawyers and engineers have told the DMV.[44] Smith said that using the name Full Self-Driving "leaves the domain of the misleading and irresponsible to something that could be called fraudulent".[48] In August 2022, records surfaced showing that the California DMV had formally accused Tesla of false advertising Autopilot and FSD in July.[49]

In Germany in July 2020, authorities ruled that Tesla misled consumers regarding the "abilities of its automated driving systems" and banned it from using certain marketing language implying autonomous driving capabilities.[50] Upon appeal, that decision was reversed in 2021 by a higher court under the condition that Tesla clarify the capabilities of Autopilot on its website.[51][52]

In a 2021 lawsuit against Tesla, Texas police officers claimed "systematic fraud" involving Tesla Autopilot after a Model X crashed into two parked police cars.[53] As of October 2022, a trial has been requested.[54] Further developments in that case are not clear and have not been reported on.[55] In September 2022, Tesla was sued by drivers in a proposed class action suit over alleged false advertising of Autopilot and FSD.[56]

Insiders revealed to the press in 2022 that the U.S. Department of Justice launched an investigation in 2022 following reports of more than a dozen crashes that involved Autopilot.[57] Then, in a 2023 quarterly company report, Tesla stated receiving subpoenas from the Department in connection with the investigation and other probes.[58]

Reselling defective vehicles

In mid 2020, Tesla was accused of reselling defective "lemon" cars in the U.S. and Europe,[59][60] followed by accounts of Norway Tesla service centers using lemons as loaners.[61] Multiple customers have accused Tesla of knowingly selling defective vehicles in China as well.[62] In September 2021, a Chinese court ruled that Tesla had acted in a fraudulent manner by reselling a customer a defective used Model S car.[62]

Autopilot

Critics argue that Tesla has published misleading safety claims about its Autopilot driver-assistance system, and that Tesla cars are actually less safe with Autopilot activated.[183][184][185][186] Tesla's "public beta" release of Autopilot has been called unsafe and irresponsible, as critical safety features are not thoroughly tested before being released to consumers.[187] The National Transportation Safety Board has criticized Tesla for neglecting driver safety, calling certain Autopilot features "completely inadequate",[188] and cited Autopilot as the probable cause of multiple deadly crashes involving Tesla vehicles.[189] A 2019 study found that Autosteer increased the odds of airbag deployment by a factor of 2.4.[190] A 2020 study found that drivers were more distracted when they used Autopilot, and the researchers called on Tesla to take more steps to ensure drivers stay attentive.[191] Another 2020 study identified significant inconsistencies, abnormalities, and unsafe behavior with Autopilot on three Tesla Model 3 cars.[192] Numerous videos have shown misuse and apparent malfunctions of Autopilot leading to collisions,[193][194] and between 2016 and 2022 at least fifteen fatalities have involved the use of Autopilot, nine of which occurred in the United States.[195]

The Center for Auto Safety and Consumer Watchdog have criticized Tesla for what they believe are deceptive marketing practices related to Autopilot.[196] Studies by AAA and the Insurance Institute for Highway Safety have shown the name "Autopilot" to be misleading, causing drivers to think the system is safer than it actually is.[197][198][199] A German court ruled in 2020 that Tesla had misled consumers by using the terms "Autopilot" and "Full Self Driving".[50]

As of March 2021, the NHTSA was investigating 23 recent accidents involving Tesla vehicles that may have been on Autopilot.[200] Tesla's Autopilot technology has struggled to detect crossing traffic and stopped vehicles, including stationary emergency vehicles, which has led to multiple fatal crashes.[201][202] (Tesla released an "Emergency Light Detection" over-the-air update to Autopilot in September 2021, and the NHTSA questioned why it did not issue a recall.[203]) Additionally, an MIT study published in September 2021 found that Tesla Autopilot is not as safe as it claims and leads to drivers becoming inattentive from regular use of the system.[204][205]

In February 2022, NHTSA began an investigation of phantom braking at highway speeds after 354 complaints from customers concerning a group of about 416,000 Tesla vehicles.[206] The complaints describe rapid deceleration that can occur repeatedly without warning and apparently at random. One owner of a 2021 Tesla Model Y reported a violent deceleration to the NHTSA from 80 mph to 69 mph in less than a second.[207] In May 2022, the NHTSA said in a letter that they had received over 750 complaints about this issue.[208]

In June 2022, NHTSA announced it was investigating 16 instances in which Autopilot shut off less than a second before a collision. Fortune suggested this "might indicate the system was designed to shut off when it sensed an imminent accident". Fortune also pointed out that Musk has frequently claimed that "accidents cannot be the fault of the company, as data it extracted invariably showed Autopilot was not active in the moment of the collision".[209] Senator Ed Markey praised the NHTSA investigation, criticizing Tesla for disregarding safety rules and misleading the public about its "Autopilot" system.[210] In April 2024, the NHTSA released the findings of its 3-year investigation of 956 vehicle collisions in which Tesla Autopilot was thought to have been in use that found that the system had contributed to at least 467 collisions including 13 that resulted in fatalities.[211]

Full Self-Driving

Tesla has also been criticized by industry observers and safety advocates for its "fast-and-loose approach" to developing its automated-driving technology.[212] Critics argue that pedestrians, cyclists, and other drivers did not sign up to take part in Tesla's "lab experiment" of testing Full Self Driving with amateur drivers on public roads.[212] In July 2021, many videos surfaced showing dangerous behavior in Tesla vehicles using the latest version of the Full Self-Driving (FSD) beta add-on.[212]

Tesla initially required all customers to sign a non-disclosure agreement (NDA) in order to take part in the FSD beta testing, which journalists noted as an attempt by Tesla to hide the system's flaws and protect itself from critics who argue that Tesla is actually making roads more dangerous.[213][214][215] In response, the NHTSA sent a formal letter to Tesla asking about the terms of the NDA.[216] Since then, videos of incidents from many beta testers have been posted online.[217] Billionaire software safety advocate Dan O'Dowd aired a commercial claiming to show a Tesla running over child-sized mannequins several times; this generated a cease-and-desist letter from Tesla, which O'Dowd dismissed.[217]

In August 2022, consumer rights activist Ralph Nader called on the NHTSA to outright remove FSD from all applicable Tesla cars.[218] Vice and Consumer Reports also noted the poor implementation of Tesla's "Safety Score" measurement, which has led to drivers taking unsafe actions such as not braking for cyclists in the hopes of increasing their safety scores.[219][220]

In February 2022, Tesla agreed to remove the "rolling stop" option from the add-on after the National Highway Traffic Safety Administration complained the practice is unsafe, and illegal everywhere in the United States.[221]

In July 2024, The Washington Post reported on Musk's potentially fraudulent promises to customers regarding Full Self-Driving.[222]

Fire risk

Leaked emails revealed that starting in 2012 Tesla knowingly sold Model S cars with a design flaw in its battery that could cause fires.[223] Toyota ended their partnership with Tesla in 2014 in part because of disagreements about structural designs that could help prevent battery damage from road debris which could cause fires.[224] Following a National Highway Traffic Safety Administration (NHTSA) investigation into two high-profile Tesla vehicle fires in 2014, Tesla added a titanium underbody shield to better protect the battery from road debris.[225]

The NHTSA investigated Tesla in 2019 for allegedly issuing over-the-air updates to cover-up a non-crash fire risk in their batteries.[226] In early 2021, Chinese regulators reprimanded Tesla after an increase in customer complaints about battery fires.[227][228]

Sudden unintended acceleration

Over 200 incidents of sudden unintended acceleration in Tesla vehicles were reviewed by the NHTSA following a defect petition filed in December 2019.[229][230] The investor who filed the defect petition said that the number of sudden unintended acceleration incidents involving Tesla vehicles was "astonishingly high" compared to other vehicles.[230] The NHTSA concluded in January 2021 that the incidents were the result of user error, due to drivers confusing the brake and accelerator pedals.[230][231]

In June 2021, Chinese regulators announced that Tesla would recall nearly 300,000 China-made and imported Model 3 and Model Y cars due to an assisted driving function that could be activated accidentally, causing sudden unintended acceleration.[232][233]

On April 17, 2024, the National Highway Traffic Safety Administration announced that Tesla had issued a recall on all 3,878 Cybertrucks due to an issue where the accelerator pedal pad would dislodge and cause the pedal to become stuck in the interior trim.[234][235][236]

Brake failures

In March 2021, the owner of a new Model 3 in China reported an accident that she believed was caused by a brake failure; a Tesla China technician reproduced the accident at the same location.[237] Tesla China later issued a statement saying that both the customer's and the technician's cars showed no signs of any malfunction.[237]

In April 2021, an angry Tesla owner protested atop a Tesla Model 3 at the Shanghai Auto Show, repeatedly yelling "Tesla brake lost control".[238] The woman says that the brakes on her Tesla Model 3 failed, nearly killing four of her family members in an accident. Tesla China disputed the claim, saying the car's brakes and emergency-warning system functioned properly.[238]

Stealth recalls

Tesla has been accused of performing "stealth recalls" by labeling safety-critical repairs as "goodwill", while also requiring customers to sign non-disclosure agreements.[239][240] Journalist and author Ed Niedermeyer called this type of agreement "unheard of in the auto industry", and noted that a policy of demanding non-disclosure agreements for "goodwill" repairs would limit the number of defects Tesla owners reported to the NHTSA.[241] The NHTSA stated they were aware that Tesla had entered into a "troublesome" non-disclosure agreement with one Model S owner regarding a failed suspension.[242][241]

Misleading safety ratings

In 2013, the NHTSA awarded the original Tesla Model S its maximum safety rating of five stars. Tesla subsequently claimed that - based on the details of the test - it actually achieved 5.4 stars, prompting the NHTSA to release a statement reaffirming that it does not award more than five stars, and that Tesla was "misleading the public" by claiming in their marketing that the NHTSA had awarded them a higher rating.[243][244]

In 2017, the Insurance Institute for Highway Safety (IIHS) awarded the Model S their second-highest rating of "acceptable," denying the Model S a "Top Safety Pick" rating due to less than satisfactory results in a frontal overlap crash test of the vehicle and its "poor" headlights.[245] Tesla responded by accusing groups like the IIHS of using methods "that suit their own subjective purposes", and dismissed the results by claiming that the Model S and Model X were "the safest cars in history" based on the NHTSA's older and less comprehensive tests.[246][247][248] Reporters noted Tesla's dismissiveness of potential safety concerns, calling it "irresponsible" and "ridiculous."[249][247]

In 2018, after the Tesla Model 3 was awarded a five-star rating by the NHTSA, Tesla claimed that the Model 3 had "the lowest probability of injury of any vehicle ever tested by NHTSA," prompting the NHTSA to publish a statement that it does not rank vehicles within the five-star category.[243] In 2019, documents acquired by PlainSite revealed that the NHTSA had sent Elon Musk a cease and desist letter in response to this and several other "deceptive" and "inaccurate" statements about the NHTSA's ratings which were made by Tesla and promoted on social media by Musk.[250][251] The NHTSA then referred the matter to the U.S. Federal Trade Commission's Bureau of Consumer Protection for further investigation.[252]

"Whompy wheels"

Starting in 2015, many Tesla drivers have complained about "whompy wheels"—an issue where the car's suspension system breaks, sometimes causing a wheel to collapse or fall off the car.[253][254][255][256] NHTSA announced it was investigating Model S suspension issues in 2016, seeking input from the company and Tesla owners after receiving multiple reports of possible suspension failures. In addition, NHTSA stated it was concerned that Tesla asked owners to sign nondisclosure agreements covering repairs for safety issues;[257] a spokesperson for NHTSA stated "The agency immediately informed Tesla that any language implying that consumers should not contact the agency regarding safety concerns is unacceptable, and N.H.T.S.A. expects Tesla to eliminate any such language."[258] Tesla disputed the characterization of NHTSA's actions as an investigation, calling it a "routine screening" instead and questioning whether the reporter, Edward Niedermeyer, had financial motivations.[259] The 2016 probe was closed without further action.[260]

Rather than issue a recall on potentially defective suspensions, Tesla has released multiple technical service bulletins warning mechanics about suspension issues and in some cases, advising replacement.[255] For example, Tesla issued SB-17-31-001 in February 2017, which stated "Some Model S and Model X vehicles may have been manufactured with front suspension fore links that may not meet Tesla strength specifications", calling for those links to be replaced as the remedy.[261] Some of the additional bulletins advising inspection and replacement include SB-17-31-002 (front stabilizer bar links, 2017 Models S and X),[262] SB-17-31-006 (front suspension lower fore links, 2016 Models S and X in China),[263] SB-18-31-002 (front upper control arms, 2017 Model 3),[264] SB-18-31-005 (front stabilizer bar links, 2017–18 Model 3),[265] and SB-19-31-001 (lower rear control arm assemblies, 2013–14 Model S).[266]

During a twelve-month period ending in April 2019, Tesla spent $4 million globally on warranty repairs to Model S and X suspensions, of which the plurality ($1.3 M) was attributed to front suspension aft links.[267] Based on data reported internally by a Tesla engineer in September 2020, Reuters calculated that approximately 5% of all Tesla Model S and X vehicles in southern Europe and the Middle East had required aft link repairs.[267] In October 2020, Chinese authorities forced Tesla to recall 30,000 Model S and X cars due to suspension issues.[256] Tesla stated the recall in China for the front suspension aft link and rear suspension upper link was to avoid "a heavy burden through the Chinese administrative process" but "there is no defect in the subject components and no associated safety-risk", reporting the root cause was "driver abuse, including that driver usage and expectation for damageability is uniquely severe in the China market" and citing the overall low incidence of failures, both in China (0.1%) and elsewhere (<0.05%).[268] However, internal records show the front suspension aft link was redesigned four times between 2016 and 2020 while Tesla was resolving 400 complaints about aft link failures in China.[267] In December 2020, NHTSA opened a preliminary evaluation (PE20-020) in response to 53 complaints alleging that front fore links fractured at the steering knuckle ball joint attachment for certain years of Model S (2015–2017) and Model X (2016–2017) vehicles, which were the parts covered by SB-17-31-001, issued in 2017.[269]

A lawsuit was filed against Tesla in 2022, alleging that after the suspension failed on a 2021 Model 3, the vehicle's undercarriage impacted the roadway, igniting the batteries; after colliding with trees, the driver and passenger died.[270][271]

In December 2023, Reuters published an investigative article showing that Tesla had dismissed prior customer claims for suspension and steering failures as resulting from prior damage or driver abuse, while internally documenting the same parts with chronic failures as flawed.[267]

Passenger Play

In December 2021, National Highway Traffic Safety Administration opened an investigation into Tesla's Passenger Play feature, which allowed riders to play games on the car's touchscreen even while the vehicle was in motion. The agency's inquiry included four models - S, X, Y and 3. A day after the investigation was officially launched, Tesla responded with an over-the-air update that disabled Passenger Play for vehicles in motion and making it only accessible while the car is parked. However, NHTSA stated it will continue with the investigation.[272][273]

Battery throttling

In August 2019, a class action lawsuit was filed in Northern California, claiming that a 2019 over-the-air software update throttled the Model S battery life, some by as much as 40 miles.[295] On December 7, 2020, Tesla settled the suit for $1.5 million.[296]

In April 2021, a Norwegian judge found Tesla guilty of throttling charging speed in a similar suit, after they failed to respond to the lawsuit. The 30 customers who were part of the lawsuit were awarded 136,000 Norwegian kroner each ($16,000).[297][298]

German Technical Inspection Association 2022 Report

In the 2022 the German Technical Inspection Association (Technischer Überwachungsverein or TÜV) evaluated passenger cars whose main inspections took place between July 2020 and June 2021, and did its first-ever evaluation of the four most popular electric cars in Germany, with their defect rates: With a defect rate of 10.7 percent, every tenth Tesla Model S failed the inspection and the Model S would end up in the bottom third of the 128 internal combustion engine (ICE) cars TÜV evaluated.[299] The General German Automobile Club states the average defect rate for 2-3 year-old ICE cars is 4.7 percent.[300]

Solar Roof lawsuit

In February 2022, Solar Roof customers sued Tesla for alleged sudden price increases and repeated delays in the solar panel installations, leading to 6,300 customers cancelling their contracts. In June 2023, Tesla settled with the customers for $6 million.[315][316]

Underreported Total Recordable Incident Rate

Tesla has acknowledged that its Total Recordable Incident Rate (TRIR, a measure of employee safety)[335] exceeded the industry average between 2013 and 2016.[336][337] Tesla did not release exact data over that period, claiming it is not representative of the factory's current operations.[333] Musk defended Tesla's safety record and argued that the company had made significant improvement; in early 2017, Tesla added extra shifts and safety teams to improve conditions.[333][334][338] However, when The Guardian reached out in 2017 to 15 current or former workers, each contradicted Musk's viewpoint.[333] Jonathan Galescu, a production technician for the company, said, "I've seen people pass out, hit the floor like a pancake and smash their face open. They just send us to work around him while he's still laying on the floor."[333] In February 2017, Jose Moran, a Tesla worker, blogged about the company's practices of mandatory overtime, frequent worker injuries and low wages.[333] Both workers are involved with the United Auto Workers (UAW)'s current organizing campaign.[339][340]

In 2018, The Center for Investigative Reporting's Reveal published an investigation concluding that Tesla under-counted worker injuries to make its safety record appear better. It included findings such as the factory floor not having clearly marked pedestrian lanes and instead having lanes painted different shades of gray because Elon Musk does not like the color yellow. In addition, other safety signals (such as signs and warning beeps) were lowered in order to please Musk's aesthetic preferences.[341] Susan Rigmaiden, former environmental compliance manager, commented: "If someone said, 'Elon doesn't like something,' you were concerned because you could lose your job."[341] Tesla called Reveal's investigation an "ideologically motivated attack by an extremist organization working directly with union supporters to create a calculated disinformation campaign against Tesla."[342] Reveal responded by publishing the details of their investigation, which included interviews of more than three dozen current and former employees and managers as well as the review of hundreds of pages of documents.[341] Additionally, many of the interviewed safety professionals had no involvement in a unionization effort.[341] A California regulator (Cal/OSHA) confirmed the 2018 under-reporting and stated that including those injuries would raise Tesla's 2018 TRIR from 6.2 to 6.5, compared to the automobile manufacturing average of 6.1.[343][344]

Injury policies criticized

Tesla's policies for dealing with injured employees has been criticized.[333] In 2017, workers alleged that Tesla's policies got in the way of workers reporting injuries.[333] At Tesla, workers who reported injuries were moved to lighter work and also lower pay, while also being given access to supplemental insurance benefits.[333] One injured worker reported that his pay went from $22 an hour to $10 an hour.[333] To protect their incomes, many workers choose to work during their recovery from injury, in some cases causing further damage and pain.[333]

Anti-union efforts

A California judge ruled in September 2019 that Tesla and Elon Musk had illegally sabotaged employee efforts to form a union.[345] Union organizers voiced concerns about high injury rates and low wages.[345] Organizers were illegally harassed by Tesla security guards, threatened with losing benefits such as stock options, and warned by supervisors that they could be fired.[346] Tesla fired one employee, Richard Ortiz, who had been active in union organization efforts.[347] In May 2021, the National Labor Relations Board (NLRB) upheld the 2019 court ruling, ordering that Ortiz be reinstated with back pay and that Musk delete an anti-union tweet.[347] Tesla later appealed and a federal appeals court sided with the original decision.[348]

In April 2022, the NLRB ruled that Tesla's dress code, which prohibited workers from wearing union logos or insignia, was unlawful,[349] although in November 2023 the United States Court of Appeals for the Fifth Circuit overturned the NLRB's ruling.[350]

In June 2022, a CNBC report found that Tesla paid MikeWorldWide to monitor a Tesla employee Facebook group and to conduct research on Tesla union organizers on social media from 2017 to 2018. MikeWorldWide monitored discussions on social networks alleging unfair labor practices at Tesla and monitored discussions on a sexual harassment lawsuit. Former and current Tesla employees told CNBC that they believe the company continues to monitor its workers on social media.[351]

In December 2022, two Tesla workers filed complaints with the NLRB accusing the company of illegally firing them in retaliation for criticizing the company's CEO, Elon Musk, in violation of federal laws protecting speech about working conditions.[352]

In February 2023, a group of workers at a Tesla factory in Buffalo, New York, dubbed Gigafactory 2, filed an injunction with the NLRB, accusing the automaker of firing more than 30 workers from the company's Autopilot unit "in retaliation for union activity and to discourage union activity."[353][354] The company, however, denied the allegations, and the complaint was dismissed by the NLRB in November 2023.[355]

In April 2023, the NLRB ruled that Tesla violated labor law by prohibiting workers at an Orlando, Florida service center from discussing pay or raising grievances about working conditions with upper management.[356]

In May 2024, pursuant to allegations raised by Workers United, the NLRB regional director in Buffalo, New York filed a complaint with the national board alleging that Tesla had implemented company policies to prevent workers at its Buffalo assembly plant from unionizing in violation of the National Labor Relations Act of 1935.[357][358][359]

Child labor in supply chain

In 2019, IRAdvocates, a US-based NGO filed a class-action lawsuit against five large technology companies including Tesla for "aiding and abetting the use of young children in the Democratic Republic of Congo (DRC) cobalt mining industry." In 2020, The Times cited Tesla's dependence on cobalt from the DRC in their lithium-ion car batteries, which have been called "blood batteries" due to incidents of child labor and extremely poor working conditions.[360] Tesla stated in 2020 that it is moving to cobalt-free batteries, without giving a timeline.[361] In the January–March 2022 quarter, half of Tesla's car batteries were cobalt-free.[362] The 2022 Tesla Impact Report reports that "Tesla's cell production growth rate will increase our demand for primary mined minerals", which includes cobalt.[363][364]

Sweatshop conditions

In December 2020, PingWest highlighted poor working conditions at Giga Shanghai, calling it "Giga-Sweatshop".[365] Employees reported being "crammed into tight workspace", intense manual labor, and office bullying. Many employees at Giga Shanghai quit after Tesla cancelled employee stock options and failed to keep its promise of paying an overtime allowance.[365]

The working conditions at Tesla's Fremont factory were criticized in 2021 by former Tesla worker Dennis Duran, who called it a "modern-day industrial sweatshop".[366]

COVID-19 pandemic

Tesla's initial response to the COVID-19 pandemic in the United States has been the subject of considerable criticism. Musk had sought to exempt the Tesla Fremont factory in Alameda County, California from the government's stay-at-home orders. In an earnings call in April, he was heard calling the public health orders "fascist".[367] He had also called the public's response to the pandemic "dumb" and had said online that there would be zero cases by April.[368] In May 2020, while Alameda County officials were negotiating with the company to reopen the Fremont Factory on the 18th, Musk defied local government orders by restarting production on the 11th.[369][370][371] Tesla also sued Alameda County, questioning the legality of the orders, but backed down after the Fremont Factory was given approval to reopen.[372][373] In June 2020, Tesla published a detailed plan for bringing employees back to work and keeping them safe,[374] however some employees still expressed concern for their health.[375]

In May 2020, Musk told workers that they could stay home if they felt uncomfortable coming back to work.[376] But in June, Tesla fired an employee who criticized the company for taking inadequate safety measures to protect workers from the coronavirus at the Fremont Factory.[377] Three more employees at Tesla's Fremont Factory claimed they were fired for staying home out of fear of catching COVID-19. This was subsequently denied by Tesla, which even stated that the employees were still on the payroll.[378] COVID-19 cases at the factory grew from 10 in May 2020 to 125 in December 2020, with about 450 total cases in that time period out of the approximately 10,000 workers at the plant (4.5%).[367][379]

Racism and harassment

Tesla has faced numerous complaints over workplace harassment and racial discrimination,[380][381] with one former Tesla worker who attempted to sue the employer describing it as "a hotbed of racist behavior".[382] As of December 2020, only four percent of leadership at the company are African American and seventeen percent are women.[383] A former black worker described the work environment at Tesla's Buffalo plant as a "very racist place".[384] Tesla and SpaceX's treatment of Juneteenth in 2020 also came under fire.[385]

Approximately 100 former employees have submitted signed statements alleging that Tesla discriminates specifically against African Americans and "allows a racist environment in its factories."[386] Furthermore, in July 2021, former employee Melvin Berry received $1 million in his discrimination case in arbitration against Tesla after he claimed he was referred to by the N-word and forced to work longer hours at the Fremont plant.[387] In April 2023, a jury found Tesla liable for the racial harassment of Owen Diaz at its Fremont facility during 2015–2016 and awarded $175,000 in damages for emotional distress, and $3 million in punitive damages.[388]

The accusations of racism culminated in February 2022 with the California Department of Fair Employment and Housing (DFEH) suing Tesla for "discriminating against its Black workers."[389] A further lawsuit regarding racism was raised by fifteen former and current employees in June 2022.[390] In April 2022, Tesla lawyers stated in a legal filing that the Equal Employment Opportunity Commission (EEOC) had opened an investigation into Tesla before the DFEH 2019 investigation,[391] and in July 2022, Tesla stated in its 10-Q filing that the EEOC had issued a cause finding against the company and that Tesla would engage in a mandatory conciliation process with the EEOC.[392] In September 2023, the EEOC sued Tesla in the Northern California U.S. District Court for permitting widespread racist harassment of black workers at its California factory and for retaliating against black workers for opposing the company's conduct.[393][394]

Sexual harassment

In 2017, a woman accused Tesla of workplace sexual harassment and was subsequently fired.[395] Her lawsuit was dismissed with prejudice in 2019.[396]

In 2021, seven women came forward with claims of having faced sexual harassment and discrimination while working at Tesla's Fremont factory.[397] They accused the company of facilitating a culture of rampant sexual harassment. According to their filings and subsequent interviews,[398] the women were consistently subjected to catcalling, unwanted advances, unwanted touching, and discrimination while at work. One of the seven, Brooks, told The Washington Post that "I was so tired of the unwanted attention and the males gawking at me I proceeded to create barriers around me just so I could get some relief" and "[t]hat was something I felt necessary just so I can do my job." Their stories range from intimate groping to being called out to the parking lot for sex.[399] Each of the women feared calling Human Resources for help as their supervisors were often participants.[400] Musk himself is not accused directly, but most of the women pressing charges believe their abuse is connected to the behavior of CEO Musk.[401] Jessica Barraza, a Tesla production associate who filed a lawsuit for sexual harassment incidents, corroborated by The Washington Post, said that Tesla's male-majority workplace culture—described in the lawsuit as resembling an archaic construction site or frat house, with frequent groping on the factory floor—is bred at the top of the company; she cited Musk's "tits" tweet as setting an example for workers at the Tesla factory that is unfair to women who work there.[402][403][404] Attorney David A. Lowe, the legal representative of six employees suing Tesla, stated, "What we're addressing for each of the lawsuits is just a shocking pattern of rampant harassment that exists at Tesla".[400]

Musk's work behavior

Musk has been criticized for his erratic behavior.[405][406][407] The Wall Street Journal reported in 2017 that, after Musk insisted on branding his vehicles as "self-driving", he faced criticism from his engineers, some of them resigning in response, and one highlighting Musk's "reckless decision making that has potentially put customer lives at risk".[408] In 2018, Tesla board members expressed concern regarding Musk's use of Ambien and recreational drugs.[409][410] Wired noted in 2018 that Musk was known amongst employees for his "unpredictable rages",[411][412] and Tesla employees were warned not to walk past Musk's desk because he was so prone to unexpectedly firing people.[413] Ex-employees said in 2019 that Musk would change the direction of the company "literally overnight" based on what was making news on social media.[414] Several professors in 2018 and 2019 noted Musk's narcissistic tendencies, and the problems this could cause for Tesla.[415][416]

Turnover rate

Tesla has been criticized for its high level of executive turnover compared to other technology companies.[417][418] With the departure of William Berry in March 2022, Tesla had five general counsel departures since 2018.[419][420] Several lower level lawyers in the company, such as deputy general counsels, have also left in 2021 and 2022.[420] Tesla has also seen considerable personnel turn-over in the roles of Chief Accounting Officer and Chief Financial Officer, as well as lead Autopilot roles.[421][422][423][424] Four top executives left Tesla in the days preceding the company's "robotaxi" event in October 2024, with senior staff saying that "a lot of people at Tesla are just tired of all the noise" and that CEO Elon Musk had lost focus on the company.[425]

Distracting from bad news

Reporter Michael Hiltzik has argued that Musk has a habit of promoting good news "relentlessly" about Tesla and himself, while creating sideshows to distract followers away from any bad news.[449] In particular, Hiltzik pointed out that Tesla's announcement in February 2021 that it was investing $1.5 billion in Bitcoin coincided with news that the Chinese government had rebuked Tesla for poor quality control and consumer relations in China, as well as a report that the company's German factory (Giga Berlin) was facing construction delays and reduced government subsidies.[449] Similarly, in July 2018, Bloomberg News reported that Elon Musk enlisted the help of the head of the Sierra Club specifically to deflect criticism over his donations to Republicans.[450]

Dispute over facts

Musk has repeatedly disputed accounts provided by Tesla founder Martin Eberhard about Tesla's early history, and reached a settlement to be able to call himself a co-founder of Tesla despite not being one of the two founders.[451][452][453]

In 2018, the NHTSA sent Musk a cease-and-desist letter over "misleading statements" about the safety of Tesla's Model 3 sedan.[454]

In 2020, the Environmental Protection Agency publicly denied a claim made by Musk that the agency made a mistake when testing the Model S sedan's mileage rating.[455]

New York Times test drive dispute

In early 2013, Tesla approached the New York Times to publish a story "Focused on future advancements in our Supercharger technology".[456] In February 2013, the Times published an account on the newly installed Supercharger network on freeway between Boston and New York City. The author describes fundamental flaws in the Model S sedan, primarily that the range was severely lowered in the below-freezing temperatures of the American Northeast. At one point the vehicle died completely and needed to be towed to a charging station.[457]

After the story was published, Tesla stock dipped 3%.[458] Three days later, Musk responded with a series of tweets, calling the article "fake",[459] and followed up with a lengthy blog post disputing several of the article's claims. He called it a "salacious story" and provided data, annotated screenshots and maps obtained from recording equipment installed in the press vehicle as evidence that Times had fabricated much of the story.[456]"[...] Instead of plugging in the car, he drove in circles for over half a mile in a tiny, 100-space parking lot. When the Model S valiantly refused to die, he eventually plugged it in."In a statement, the Times stood by the accuracy of the story, calling it "completely factual".[459] Author John Broder quickly issued a rebuttal in which he clarified and rejected many of the accusations made by Musk.[460]"[...] I drove around the Milford service plaza in the dark looking for the Supercharger, which is not prominently marked. I was not trying to drain the battery. (It was already on reserve power.) As soon as I found the Supercharger, I plugged the car in."During further investigation by the media, Musk said "the Model S battery never ran out of energy at any time, including when Broder called the flatbed truck." Auto blog Jalopnik contacted Rogers Automotive & Towing, the towing company Broder used. Their records showed that "the car's battery pack was completely drained."[461] In his follow-up blog post, Broder said "The car's display screen said the car was shutting down, and it did. The car did not have enough power to move, or even enough to release the electrically operated parking brake."

In the days that followed, NYT public editor Margaret Sullivan published an opinion piece titled "Problems With Precision and Judgment, but Not Integrity, in Tesla Test". She concludes, "In the matter of the Tesla Model S and its now infamous test drive, there is still plenty to argue about and few conclusions that are unassailable."[462] No legal action was pursued.

$56 billion pay package suit

In 2018, when Tesla's board of directors approved a pay package to Elon Musk worth $55.8 billion, a Tesla shareholder filed a lawsuit, claiming that the package had a "conflict of interest" and the package worth far exceeded the industry average. In 2024, Delaware judge Kathaleen McCormick voided the pay package, noting that Musk had "extensive ties" with the negotiators, and failed to prove the fairness of the package. Musk responded by tweeting "Never incorporate your company in the state of Delaware."[486][487]

Nvidia AI chip purchase

In June 2024, CNBC revealed that Elon Musk ordered Nvidia to redirect "a sizable shipment of AI [ artificial intelligence] processors that had been reserved for Tesla to his social media company X". A former Tesla supply chain analyst noted that this move willingly delayed Tesla's progress in building out its autonomous driving and robotics capabilities.[488] Musk responded to concerns by saying "Tesla had no place to send the Nvidia chips to turn them on, so they would have just sat in a warehouse," until the south extension of the Gigafactory Texas is complete.[489]