Tesla settles $1M penalty for air quality violations at Fremont factory

FREMONT, CALIFORNIA - MAY 12: An aerial view of the Tesla Fremont Factory on May 12, 2020 in Fremont, California. Alameda County has ordered Tesla's CEO Elon Musk to halt production at Tesla Fremont Factory days after Musk defiantly opened up the ele

Officials from the Bay Area Air Quality Management District said Friday that Tesla, Inc., has agreed to pay a $1 million penalty and install a solar roof project to settle air quality violations at its Fremont automobile factory.

The settlement covers 33 notices of violation that the air district issued to Tesla. The notices of violation cover a range of violations, including emissions exceeding Tesla's permit limits, installing or modifying equipment without proper permits, failure to conduct required emissions testing, failure to maintain records and failure to report information to the air district in a timely manner.

"This settlement requires Tesla's compliance with Air District regulations at its Fremont facility and demonstrates the Air District's continuing efforts to ensure strict compliance with air pollution regulations while seeking mutually beneficial solutions for the community," said Jack Broadbent, the air district's executive officer. "As part of this settlement, Tesla has agreed to implement a community microgrid project, which leverages the company's technological expertise in developing next generation power here in the Bay Area."

The community microgrid project will consist of the installation of a solar electric system of approximately 160 kilowatts, paired with a two-powerpack storage system. Tesla will fund the implementation of this solar microgrid system in a community prioritized under the air district's Community Health Protection Program, which focuses on improving air quality and public health in the Bay Area's most heavily impacted areas.

The goal is to reduce electricity costs as well as localized air pollution emissions within the community. The project will provide emissions-free electric power and also provide reliability in the event that grid power is unavailable due to Public Safety Power Shutoffs or other reasons.

The air district said the settlement agreement also commits Tesla to implementing a comprehensive environmental management system, which will track all applicable environmental requirements and ensure that the company's managers are trained on what is needed to comply with them. The environmental management system is designed to ensure that Tesla remains in full compliance going forward.

Tesla has already begun implementing such a system, but Friday's settlement agreement will make this a legally binding and enforceable commitment.