Tesla settles lawsuit alleging it mishandled hazardous waste

  • Tesla settled a lawsuit alleging it mishandled hazardous waste in California.

  • District attorneys alleged Elon Musk's company disposed of waste at the wrong trash sites.

  • Tesla previously said it's addressing its waste management programs.

Tesla is set to pay $1.5 million to settle a lawsuit that alleged the carmaker mishandled hazardous waste at its factories in California.

Elon Musk's company was hit with the lawsuit on Tuesday.

District attorneys representing 25 counties in California had filed the lawsuit in San Joaquin County Court, requesting the court force Tesla to properly take care of its hazardous waste going forward and pay a series of civil penalties.

Reuters was the first to report on the legal filing.

Tesla disposed of hazardous waste into trash sites "not permitted to accept hazardous waste" and "failed to properly mark, label, and store containers and tanks of hazardous waste" at its facilities, according to the lawsuit.

The waste included things like oil, paint, and used batteries — materials that could make their way into the groundwater if not properly disposed of, according to the lawsuit.

The lawsuit also alleged Tesla didn't properly train its employees on how to deal with hazardous materials.

Two days later San Francisco District Attorney Brooke Jenkins announced that Tesla would pay a $1.5 million settlement, including $1.3 million in penalties and $200,000 towards the cost of investigating the issue.

Under the settlement, the company must also hire a third party to perform annual audits of some of its disposal sites for a period of five years.

"While electric vehicles may benefit the environment, the manufacturing and servicing of these vehicles still generates many harmful waste streams," Jenkins said in the press release. "Today's settlement against Tesla, Inc. serves to provide a cleaner environment for citizens throughout the state by preventing the contamination of our precious natural resources when hazardous waste is mismanaged and unlawfully disposed."

Tesla had noted that the district attorneys were investigating its "waste segregation practices" in its recent 10-K filing.

"Tesla has implemented various remedial measures, including conducting training and audits, and enhancements to its site waste management programs, and settlement discussions are ongoing," the company said in the regulatory filing. "While the outcome of this matter cannot be determined at this time, it is not currently expected to have a material adverse impact on our business."

A spokesperson for the car company didn't respond to Business Insider's request for comment.

It's not the first time Tesla has faced scrutiny for the environmental impact of its factories. In 2019, Tesla paid the Environmental Protection Agency a $31,000 settlement over alleged hazardous waste violations at the Fremont Factory. In 2022, Tesla paid the EPA $275,000 after the agency claimed the Fremont Factory had violated the Clean Air Act.

Similarly, Musk's The Boring Company got violations from the Texas Commission on Environmental Quality in Bastrop, Texas after a complaint alleged the tunnel-digging company had allowed untreated wastewater to drain into the Colorado River.

Update February 2, 2024: This story has been updated to reflect Tesla settling the lawsuit over hazardous waste disposal.

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