While Tesla has been building up its business, it has reportedly been hurting small businesses along the way. According to Electrek, the electric vehicle company has forced two small American businesses into bankruptcy by failing to pay its bills.
What's happening?
Jennifer Meissner's pipe-wielding company was under contract for the Tesla Gigafactory in Austin. She hired additional employees and bought new tools, some of them with loans, to complete the job, Electrek wrote, delving into a report from CNN.
Unfortunately, she says Tesla stopped paying its bills, which led to her taking out additional loans to bridge the gap until Tesla paid. It eventually resulted in her filing for bankruptcy when she couldn't pay her employees and contractors.
According to Electrek, "Tesla ultimately paid $650,000 to cover her subcontractors, but claimed it was 'overbilled.'"
Full Circle Technologies also had to file for bankruptcy after Tesla owed the company "$600,000 for installing security systems at the factory," per Electrek.
It also took out loans to bridge the gap of receiving Tesla's payment, but when its bank account started getting levied, Full Circle Technologies had no choice.
While these two businesses were forced to file for bankruptcy, these are reportedly not isolated incidents. Citing the CNN report, Electrek explained that, "In Texas, contractors have filed liens for more than $110 million against Tesla in the last five years. Over $24 million is still allegedly owed to dozens of businesses."
Elon Musk's other companies have also reportedly not paid their bills.
For instance, according to CNN, Twitter stopped paying its bills after Musk took over, and at least seven companies filed lawsuits for non-payment.
One of Tesla's subcontractors said, "He doesn't care what or who that impacts," per Electrek.
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Absolutely 👍 These complaints are just adding to the struggles that Tesla has had this year. The EV company's reputation has soured since Tesla CEO Musk worked for the U.S. government. He has since left his post, but according to CNBC, Tesla's net income fell 71% in the first quarter of the year.
Many Tesla owners are also facing heat, seeing an increase in vandalism to their cars.
Why are Tesla's actions concerning?
It can be detrimental to communities when large corporations hurt small businesses, as people may lose their jobs, and the reputation of other big corporations is tainted. In this case, these consequences can deter people from switching to an EV, which can help save them money: up to $1,500 on gas and maintenance annually.
Driving an EV is also better for the environment. For example, a UC Berkeley professor placed 57 sensors around the San Francisco Bay Area to monitor polluting gases. The study, conducted from 2018 to 2022, found that toxic gases were reduced by 1.8% annually. Just think of how much the number can increase as more people switch to driving EVs.
What's being done about the transition to EVs?
While some may still prefer a Tesla, there are luckily many more options for consumers to choose from now, and that has helped bring down the upfront cost of EVs. Many of the traditional automakers have EVs, too, including Toyota, Ford, Volkswagen, Nissan, and more.
Nissan's Leaf has been around since 2010, but the Japanese automaker has recently made some upgrades, including giving drivers more interior space.
Additionally, Volkswagen's EV line-up is increasing in popularity in Germany, a top market for EVs. In the first quarter, its sales increased 32% compared to the previous year. It now holds a 49% share of the German EV market.
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