Tesla Nikola

Tesla Rejects Environmental Violations From U.S. And German Regulators

Tesla is currently defending itself in the U.S. and Germany against accusations that the EV maker has violated environmental rules.

According to a recent financial filing, Tesla (NASDAQ: TSLA) is facing allegations from regulators in the U.S and Germany. The regulators say that the company has not provided adequate information related to federal pollution regulations and old batteries from its cars.

The U.S. Environmental Protection Agency said that Tesla failed to show its compliance with federal emissions standards for hazardous air pollutants. The EPA is trying to find details about how Tesla handles the “surface coating” of its cars. Tesla’s main vehicle plant in Fremont, California has had a host of issues, including insufficient cleaning and maintenance problems as well as fires. 

What does this mean for Tesla investors? 

These types of claims are not good for any business, but it seems the problems for Tesla keep stacking up which has made some shareholders nervous about the stock as a long-term investment.  

On Wednesday, Tesla stated that it “has responded to all information requests from the EPA and refutes the allegations.” The manufacturer said it does not expect the allegations to have any material impact on its business. 

Across the pond in Germany, authorities have fined the company €12 million ($14.5 million) for failing to make public notifications and fully fulfill their duties to take back old batteries from customers. Tesla has denied these accusations and has filed an objection, stating that the company has continued to take back batteries and the issues in Germany are primarily relating to admin requirements. 

It will be important for Tesla, and indeed its investors, that the EV maker has a good relationship with German authorities as the company is in the middle of building its first European plant just outside of Berlin. 

As competition for Tesla heats up in the U.S. and China, a European expansion will be vital for the company’s success and something that will make the stock look a lot more attractive. Tesla estimates that limited production out of its Berlin-area factory will kick off this year and volume production should start in 2022. However, executives for Tesla did not comment on how potential permit revisions could impact timing for the start of production in Germany. 

Shares of Tesla are down more than 5% since Monday despite the EV makers blowout earnings report. 

We recently had our say on how we expected Tesla to do in its latest earnings release, check it out here

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