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Tesla Fails to Comply With Some Pollution Rules, EPA Says

Tesla shares eased after the EPA said the electric-vehicle producer had failed to comply with some air-pollution rules. The company denies the claim.
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Tesla  (TSLA) - Get Tesla Inc. Report shares eased Wednesday after the Environmental Protection Agency accused the electric-vehicle producer of failing to comply with some air-pollution rules.

This month, “we received a notice from the EPA alleging that Tesla failed to provide records demonstrating compliance with certain requirements under the applicable National Emission Standards for Hazardous Air Pollutants,” the Palo Alto, Calif., company said in a Securities and Exchange Commission filing.

The hubbub relates to regulations for surface coating of automobiles and light-duty-truck regulations.

“Tesla has responded to all information requests from the EPA and refutes the allegations." the company said.

"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.” 

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Tesla shares recently traded at $699.50, down 0.7%. They have slumped 19% over the past three months as investors were wary of the stock's valuation. Founder Jim Cramer on Tuesday discussed Tesla’s first-quarter earnings.

The numbers came in better than expected, thanks in part to surging deliveries in China. Tesla notched its seventh-consecutive quarterly profit and forecast late 2021 launches for planned gigafactories in the U.S. and Germany.

Last week, controversy hit the company, as Consumer Reports said its engineers "easily tricked" a Tesla 2020 Model Y to drive on Autopilot, the EV maker's driver-assistance feature, without anyone in the driver’s seat.

The magazine pointed out this was “a scenario that would present extreme danger if it were repeated on public roads.”

Consumer Reports said, “Over several trips across our half-mile closed test track, our Model Y automatically steered along painted lane lines, but the system did not send out a warning or indicate in any way that the driver’s seat was empty.”