An aerial view shows the Tesla Fremont Factory in Fremont, California on February 10, 2022.
(Photo : JOSH EDELSON/AFP via Getty Images)
The U.S. Environmental Protection Agency (EPA) announced on Tuesday, February 22, that it had reached a settlement agreement with Tesla regarding the automaker's Clean Air Act violations. Elon Musk's company agreed to pay a $275,000 penalty for those violations which transpired at Tesla's manufacturing facility in Fremont, California.
The EPA explained in its announcement that Tesla violated regulations known as the National Emission Standards for Hazardous Air Pollutants for Surface Coating of Automobiles in the company's Fremont factory from October 2016 to September 2019.
According to the regulators, Tesla failed to develop and/or implement a work practice plan in Fremont to minimize hazardous air pollutants emissions from the storage and the mixing of materials used in vehicle coating operations.
EPA cites numerous violations in Tesla's Fremont facility
The EPA also pointed out that Tesla failed to perform required monthly emissions calculations in its Fremont plant correctly. These calculations are needed for Tesla to demonstrate that the factory's coating operations complied with hazardous air pollutant standards set by the federal government.
In addition to that, Tesla also failed to collect and keep all required records related to calculating the hazardous air pollutants emission rate for the company's coating operations in the Fremont facility.
The paint shop at Tesla's car facility in Fremont grabbed the headlines from 2016 through 2019 after multiple fires transpired in that area during that period. Employees told CNBC in an interview back in 2018 that months before the fire struck the facility in April of that year, filters below the exhaust systems and paint booths that were meant to clean and carry air into and out of the factory were visibly coated with clearcoat and paint.
The people interviewed blamed the fires that engulfed the Fremont facility partly on insufficient training for new Tesla employees in the face of high pressure to meet production targets, improper cleaning, and maintenance. Two Tesla employees at the time of the 2018 interview said that they were concerned about their health because of the Fremont factory's poor air quality and fire hazards.
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Tesla's fine a tiny fraction of its net income for 2021
The EPA agreed with them, saying Tesla's facility in California applied coating materials containing naphthalene, xylene, formaldehyde, and ethylbenzene, chemicals that are known or suspected to cause not only cancer but also other serious health effects.
According to the EPA, Tesla has already corrected those violations, returning to compliance. It is important for EPA to use compliance monitoring to ensure the companies they are regulating follow environmental laws.
The $275,000 penalty that EPA imposed on Tesla will not hurt the company, though, with the world's leading electric car maker reporting a massive $2.3 billion in net income during the fourth quarter of last year. Tesla ended 2021 with $5.5 billion in net income, a tremendous jump compared to $721 million in 2020.
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