Tesla Model 3

Tesla under pressure from ex-employee whistleblowers

Image credit: Tesla

Electric vehicle pioneer Tesla could soon be under investigation by the US Securities and Exchange Commission (SEC), after two separate ex-employee whistleblowers made accusations of malpractice occurring at the company's manufacturing facilities.

Karl Hansen - a former member of Tesla’s internal investigations team - has claimed that Tesla is spying on employees at its Gigafactory electric battery plant in Nevada and has also failed to act on information that suggests a Mexican cartel may be dealing drugs inside the plant.  

Stuart Meissner, Hansen’s attorney, revealed the information in a statement to the press, stating that Hansen - formerly a member of Tesla’s internal investigations team - had filed a ‘tips, complaints and referrals’ form to the SEC about the Gigafactory on 9th August 2018.

Hansen alleges that Tesla, at the behest of CEO Elon Musk, installed surveillance equipment in the Gigafactory in order to eavesdrop on the personal mobile phones of employees. Hansen also claims that Tesla did not disclose to investors the theft of $37m-worth of copper and other raw materials from the factory earlier this year.

Further, Hansen claims that Tesla failed to disclose a written notice from the US Drug Enforcement Administration (DEA) about a Tesla employee possibly selling cocaine and crystal methamphetamine from the Nevada factory on behalf of a Mexican drug cartel. Hansen identified links between the Tesla employee and members of the drug cartel and urged Tesla to disclose this information to the DEA, according to Meissner.

Hansen was the subject of retaliation by Tesla and was fired from his post on 16th July after raising these issues internally, Meissner claims.

Hansen is the second Tesla employee to file a whistleblower complaint with the SEC. Martin Tripp, another former Gigafactory worker represented by Meissner, told the SEC that Tesla inflated the number of Model 3s being produced each week, that it used punctured batteries in its vehicles, and that it reused scrapped parts in vehicles “without regard to safety,” according to his attorney. Tesla denies these claims.

Similarly to Hansen, Tripp contacted the SEC after he was fired by Tesla, who have sued him for allegedly hacking trade secrets and transferring internal documents to third parties. Tesla CEO Musk accused an unnamed employee of “quite extensive and damaging sabotage to our operations” in an email sent to all Tesla staff.

Until this week, Tripp - a former Tesla process technician - had been tweeting internal emails, photos and vehicle identification numbers that he says are all evidence of flawed manufacturing practices at Tesla’s battery factory, potentially putting end users’ lives at risk. Tripp has since closed his Twitter account.

Tripp’s photos - which can still be found elsewhere on the internet - supposedly show vehicle identification numbers for cars that have had batteries containing damaged cells installed, a high level of waste in the manufacturing process at the factory and the storing of waste materials and scrap metal out in the open and not in temperature-controlled warehouses, as Tesla claims.

Tesla’s terse response was: “As we’ve said before, these claims are false and Mr. Tripp does not even have personal knowledge about the safety claims that he is making. No punctured cells have ever been used in any Model 3 vehicles in any way and all VINs that have been identified have safe batteries. Notably, there have been zero battery safety issues in any Model 3.”

Whistleblowers can receive a financial reward ranging between 10-30 per cent of any penalties the SEC imposes and collects on errant companies.

Earlier this week, a stressed Elon Musk - talking about Tesla in an interview with the New York Times - said, “This past year has been the most difficult and painful year of my career. It was excruciating.” Last week, Musk sent shock waves and alarm bells ringing across the financial world when he tweeted that he wanted to take the publicly traded company private, buying up all shares for $420 each. Musk has since attempted to clarify the serious intent behind his tweet, saying, “I was not on weed, to be clear”.

Despite its ongoing problems, Tesla is still worth slightly more on the stock market - approximately $54bn at time of writing - than American automotive legend General Motors.

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