Elon Musk made big promises to Wall Street about Tesla’s new Model Y SUV in 2022, and the company was ramping up its production in Austin, Texas, when environmental problems threatened to derail his plans.
The door to the plant’s giant casting furnace, which melts metal to be molded into the Model Y’s parts, wouldn’t shut, spewing toxins into the air and raising temperatures for workers on the floor to as high as 100 degrees. Hazardous wastewater from production—containing paint, oil and other chemicals—was also flowing untreated into the city’s sewer, in violation of state guidelines.
Tesla left the costly problems largely unaddressed during the critical ramp-up. As a result, the company’s 10 million-plus square foot plant—among the largest car factories in the world—dumped toxic pollutants into the environment near Austin for months.
This account of the Austin plant’s environmental problems, which haven’t been reported previously, comes from emails between Texas regulators and the company obtained by The Wall Street Journal in response to public-records requests, as well as interviews with former employees and other documents, including a memo sent by a whistleblower to the Environmental Protection Agency.
A Journal investigation shows that Tesla bosses were aware of the problems but sometimes chose short-term fixes to avoid slowing production. Former employees said they feared they might lose their job if they drew attention internally to potential environmental hazards, because senior managers didn’t consider such issues to be mission critical. As head of the company, Musk set the tone, these people said, pushing employees to move fast and complaining frequently in public statements that unnecessary regulations are strangling the U.S.
The world’s richest man now has an even bigger megaphone. Musk, who aligned himself closely with President-elect Donald Trump during his campaign, was named Nov. 12 as co-head of a new Department of Government Efficiency, or “DOGE.” Musk has said he thinks he can chop “at least $2 trillion” from the federal budget, including by cutting government jobs at regulatory agencies. How that will play out for the EPA is unclear, but some people who have worked with him for years expect that Musk will attempt to curb environmental regulations—including those that affect his companies.
“We finally have a mandate to delete the mountain of choking regulations that do not serve the greater good,” Musk tweeted after Trump’s announcement.
Tesla and Musk didn’t respond to requests for comment.
Musk is considered a champion of the environment for his role in pioneering the electric car industry. He has said the mission of Tesla, which is the largest maker of electric cars in the U.S., is to “protect life on Earth.” Yet across his business empire, Musk’s companies show a pattern of breaking environmental rules again and again, federal and state government filings and documents show.
Tesla’s Fremont, Calif., facility has accumulated more warnings for violations of air pollution rules over the past five years than almost any other company’s plant in California, according to a Journal analysis of informal enforcement actions in the EPA’s compliance database. It is second only to a refinery owned by oil-and-gas behemoth Chevron, which is in nearby Richmond.
This year, California regulators said Tesla violated air-pollution permits at its Fremont factory 112 times over the past five years and alleged it repeatedly failed to fix equipment designed to reduce emissions, releasing thousands of pounds of toxic chemicals in excess of permissible limits into the surrounding communities. “Even after extensive discussion,” Tesla’s efforts “have not been enough to stem the violations,” the abatement order from the Bay Area Air Quality Management District read. Tesla denied the allegations in the state proceeding. Since the order was filed, the regulator has issued 75 additional notices of violations to Tesla, according to a spokesperson.
Musk’s rocket company, SpaceX, has also had run-ins with regulators in Texas and community pushback in Florida, including over the impact of its launches on local plants and animals. Federal regulators recently fined the company for dumping about 262,000 gallons of wastewater from launches into wetlands in Texas without a permit. SpaceX has denied the allegations.
Complying with environmental rules isn’t usually the top priority for Tesla management, people familiar with the company’s officials said. Tesla brought to the auto industry a Silicon Valley ethos to move fast and break things, and Musk views regulations as a hindrance to innovation because they slow down the work, the people said.
At the factory in Austin, managers sometimes ignored workers who raised warnings about environmental issues, former employees say. Some employees feared they would be fired if they slowed down production.
One environmental-compliance staffer in the Austin plant claimed that “Tesla repeatedly asked me to lie to the government so that they could operate without paying for proper environmental controls,” according to a 2024 memo from the employee to the EPA that was reviewed by the Journal.
The staffer sent the detailed memo alleging environmental violations at Tesla to the EPA. The memo, including hundreds of pages of state regulatory documents, as well as photos and videos, was reviewed by the Journal. The EPA’s criminal-enforcement division and the Texas Commission on Environmental Quality earlier this month opened a preliminary inquiry related to the former Tesla staffer’s allegations, according to people familiar with the matter.
Multiple employees left Tesla without severance pay after declining to sign nondisclosure agreements to keep quiet about their work for the company, including environmental and other noncompliance issues they witnessed, people familiar with the negotiations said.
Tesla has continued to draw the attention of regulators. On June 4, 2024, Austin Water regulators notified Tesla that it had violated its permit with the city when it discharged to the sewer system more than 9,000 gallons of wastewater that wasn’t properly treated for pH, according to documents released under public-records requests. On Aug. 30, 2024, TCEQ notified Tesla of five violations, including exceeding its permitted emissions limit for certain air pollutants and not disclosing deviations, according to the documents.
Environmental lawyers say state regulators rely on companies to self-report environmental lapses and don’t typically levy fines or take other punitive measures against them. “The underlying theme for enforcement is to create an environment where companies get back to compliance,” rather than to penalize them heavily and discourage them from self-reporting, says environmental lawyer Lynn Grayson.
Musk moved Tesla’s headquarters from California to Austin in 2021, citing tax incentives, lesser regulatory oversight and the general political climate. Environmental regulators in Texas—like most states—are charged with monitoring compliance under the Clean Air Act, the Clean Water Act and other federal statutes.
The year before, Tesla sold nearly 500,000 vehicles, and sales were growing rapidly. But Musk had moonshot ambitions for the company to grow sales by more than 50% each year to eventually hit his goal to sell 20 million cars in 2030. Giga Texas was a vital part of the plan and to get there, Tesla set a goal to manufacture 5,000 Model Ys a week at the factory.
Everything about the nearly mile-long Gigafactory in Austin is outsized, including the casting shop, where the roughly 30-foot-tall furnaces do the old-fashioned work of melting aluminum to be molded into car parts in giant die-casting machines.
The furnace temperature can soar to around 1,200 degrees, but in 2022 the massive door wouldn’t close, creating a slew of environmental and safety issues.
For months, the door yawned open as car production churned up. Such a defect would typically cause the furnace to use more fuel and to emit higher levels of pollutants from its smokestack, according to former employees. A constant haze enveloped the factory floor and temperatures reached 100 degrees, they said.
When a TCEQ regulator arrived for a site visit in early fall 2022, Tesla employees employed an “elaborate ruse” to hide the issues, adjusting the amount of fuel going into the furnace and temporarily closing the door, the memo sent to the EPA alleged. These actions allowed Tesla to pass the important emissions test, according to the memo.
The staffer’s memo said managers were aware the regulator’s tests didn’t represent “actual operating conditions,” but the gambit worked, and the factory received a passing grade. Afterward, the fuel levels were put back to their regular settings, the memo said. Former employees say the furnace door wasn’t permanently fixed for several more months.
In August 2024, TCEQ issued notices of violation to the company related to fuel use. By the time the regulator issued the notices, Tesla had already largely resolved the problems, according to TCEQ documents.
TCEQ disclosed through a public information request from the Journal that there were 15 investigations of the Tesla Austin facility—14 related to air and one to waste.
With production ramping up at the Gigafactory in the spring of 2022, Tesla decided to celebrate the new facility with a party. It dubbed the event the “Cyber Rodeo.”
Workers got ready by rolling in mechanical bulls and buffing the factory floors to a shine for 15,000 guests, including investors and VIPs like Harrison Ford, who were set to tour the facility.
But behind the scenes, some environmental engineers and others at Tesla were fretting about a roughly six-acre, triangular-shaped “evaporation” pond Tesla built to hold wastewater from construction, chemical spills and its paint shop.
The pond was filled with toxins, including sulfuric and nitric acids, and the algae-colored water had begun to smell of rotten eggs, former employees said. At one point, employees found a dead deer in the water, they said. For a time, Tesla discharged untreated pond water directly into the sewer system without permission from Austin Water, the water utility for the city, according to former employees and emails from regulators.
By the time of the party, Tesla had self-reported its actions to Austin Water. To hide the eyesore, it hired a team of contractors to pump most of the pond’s water into trucks across the road, after having secured permission to then divert the water from the trucks into the sewer system.
Austin Water said in a statement that it later issued a notice of violation in connection with the pond to Tesla through email and required the company to meet monthly to “avoid further violations,” and that it works to develop a “working partnership with our industrial customers” to protect the city’s wastewater treatment facilities.
Sometimes during rainstorms, Tesla discharged a sludgy mix of mud and chemicals from occasional spills outside the plant, turning a ¾ mile stretch of the Colorado River into a mucky brown slick, according to pictures and videos viewed by the Journal.
A top civil engineer at Tesla “repeatedly committed to fixing the storm sewer system” in 2022 but “never directed any serious repairs,” a former staffer wrote in the memo to the EPA outlining the issue. Instead, Tesla periodically cleaned the storm sewer with pressurized water and vacuum trucks, according to the memo reviewed by the Journal.
Even when it wasn’t raining, the Gigafactory generated vast amounts of industrial wastewater as it built cars—about 500,000 gallons a day, currently according to the water utility—and like most companies it was required to obey certain rules in disposing of it.
Throughout the day, water flowed from across the factory into three large tanks, where much of the contamination was supposed to be filtered out before being released into the local sewer system.
The company had assured regulators multiple times that its system was working, according to state regulators and emails reviewed by the Journal. But the system wasn’t completely separating out pollutants, according to former employees and an April 2022 email reviewed by the Journal.
As a partial stopgap, the company assigned a staffer to manually test the wastewater, according to the memo sent to the EPA and former employees. But despite their efforts, the levels exceeded what Tesla’s permit allowed, and between Sept. 9-11, the company released 259,000 gallons of caustic water into the Austin sewer system, according to emails from state regulators to Tesla that were reviewed by the Journal. In a statement, Austin Water said the release didn’t pose a threat to fish or other aquatic life, and that Tesla “did not receive a permit to discharge process water until all pretreatment systems were installed and operational.”
On Sept. 20, Austin Water issued two notices of violations to Tesla for exceeding the pH limit in its permit, according to state regulators and emails to Tesla provided by the city of Austin under a public information request.
Problems mounted a few days later when an outside lab that Tesla hired to test its wastewater notified environmental staff that the company had exceeded its permit level for zinc, according to the memo and former employees.
Environmental staff notified Austin Water, but one member refused to comply with a request from Tesla managers to lobby the regulator not to consider the violation as a “significant non-compliance,” according to the memo.
In late November, Tesla again urged the environmental staffer to reach out to Austin Water. The staffer refused.
That same week, Tesla fired the staffer for “pushing back on their requests” according to the memo.
John West contributed to this article.
