• Aug 25th 2010 at 2:55PM
  • 25
Sometimes, technology moves faster than rules and regulations. For instance, in some parts of Kansas, shops must provide water troughs for horses. A more recently inanity is the requirement that electric vehicles receive an emissions "Certificate of Conformity" from the EPA to comply with the "Clean Air Act." And, while Kansan storekeepers have long been excused from abiding by the obviously obsolete ordinance, such is not the case for America's best known electric car maker, Tesla Motors.

In its Securities and Exchange Commission 10-Q filing for the quarter ending on the 30th of June, Tesla noted that expenses may be incurred from complying (or, in this case, not complying) with the myriad regulations that govern the activity of providing automobiles for sale to the public. As an example of such, it mentions being found in contravention of the requirement to have the aforementioned certificate for the vast majority of 2009. It had the necessary document in 2008. As a result, it and the EPA:
...entered into an Administrative Settlement Agreement and Audit Policy Determination in which we agreed to pay a civil administrative penalty in the sum of $275,000...
Ouch.

While we can only imagine what better things Tesla might do with that kind of cash – employ several Californians for a year, give a Roadster Sport 2.5 to a deserving blogger or two – the fact is that this requirement still stands as a testament to the absolute ludicrousness of the inflexibility ingrained in some of our regulatory bodies. Good grief.

[Source: Tesla Motors via EVTV]


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    • 1 Second Ago
  • 25 Comments
      • 5 Years Ago
      Look, everyone can cry about how this regulation is stupid or it doesn't apply to EV's. Whatever. Nevertheless, it's still a basic requirement in the US Auto industry. Nissan has to do it for their Leaf, GM had to for their EV-1. It's just paperwork.

      The big concern here is that Tesla doesn't have the basic business practices set up to catch these kind of required submissions. They did it in 2008 but, oops, forgot to do it in 2009. They're a company flying by the seat of their pants, which is ok if you're a dot com web company. But if you plan to survive in one of the most heavily regulated industry there is, Tesla's "were not anything like Detroit" attitude is undisciplined and will end up being a major achilies heel for them.

      There are 100's of regulations that the Model S will have to conform to before that vehicle can be sold. Are they aware of all of them right now?
      • 5 Years Ago
      This is further evidence that our government is:

      A: Bought and paid for by car companies.
      B: Bought and paid for by oil companies.
      C: So far behind the times with technology.
      D: Run by a bunch of flowers (aka Blooming Idiots).
      E: all of the above.

      • 5 Years Ago
      Quote from the article : '' give a Roadster Sport 2.5 to a deserving blogger or two ''

      That's explain the elcheapo attitude toward my posts. Many of the bloggers here are already paid, generally by petrol-goverment-banks-news agencies-car manufacturers satellite compagnies associated. The money from petrol-tax is just nonsense, it's not reality or if it is then a dollar is just what it count. The taste from car guy's don't worth anything. I never saw a single time some taste concerning a car expressed by some blogger or journalist. It's aseptised babylike head-fights to protect hypocritally petrol or smaller, costlier rides like prius. Even chris m, many time said that the solution was to buy a dinky car, move near where you work, go to work with your foots, plan your errants to do all your shopping in one shot, and pay extra money to the electric utility and forgot for life a car guy experience with a powerful deluxe ride even if not long time ago it was the dream of most americans and germans to have a big powerful ride. Most other contries never experienced a el cheapo big ride, ask the japaneses, all their 400 cc and bigger motorcycles are impeded to own in japan, it's only for europe and america, LOL. I don't know how a japanese workers at kawasaki can assemble a 200 m.p.h motorcycle and knowing that never in his life can own and drive this.

      A fuelcell ride is so powerful and affordable and non-polluting , that all these folks have made a huge depression and crisis when they discovered it some years ago and they discovered at the same time that their jobs is not anymore needed. I admit that if fuelcell and hydrogen come to the market, then approx 20-30 millions folks will lose their jobs, that's not sad and i don't want to give my money to imcompetants, im not a communist.

      • 5 Years Ago
      To put this in perspective

      huge fine = less than 3 roadsters.
        • 5 Years Ago
        But it is probably the profit of them selling 10. (It is probably $275k after tax dollars)

        However, this is a stupid regulation when it comes to pure electric vehicles. Cars without tailpipes should be exempt, not fined. I would love to drive an electric vehicle to an e-check location if they still had them in Ohio and see what they would do.

        • 5 Years Ago
        Haha true..

        This happens all the time for high end cars actually.
        Mercedes, BMW, Porsche, ETC. all offset their CAFE fines by tacking it on to the total price of the car
        • 5 Years Ago
        @rcappo

        1. They do have them in Ohio still...I was just at one a month or so ago.
        2. They probably wouldn't even realize it. All they did to my car was start it up and run it for a while, and if it didn't display any codes, I was good to go. Pointless.
      • 5 Years Ago
      I am not familiar with the regulation.
      But to assume it is absurd from one perspective in one instance is absurd itself.
      Regulations without penalty are pointless and would hardly encourage businesses to do anything beyond chuckle if they noticed their violation at all.

      And if you are going to write an article calling the regulation pointless, then you might have taken the time to inform us what the purpose of the regulation is.
      I mean - you equated it to Kansas store fronts being legally bound to provide drinking water for horses.
        • 5 Years Ago
        The Certificate of Conformity is to certify tailpipe emissions are within EPA specs. The Roadster lacks a tail pipe. Perhaps I should have made that more clear.

        My point is that common sense could be applied in a situation like this, though ideally they should have complied as required in the first place and lobbied to have the regulation altered.
      • 5 Years Ago
      Time for Tesla to pay their fine. They screwed up.

      Heck, I looked into personally importing a European car for my own personal use, and I was able to read and figure out what was required for a Certicate of Conformity. And I'm just a every-day guy. Tesla should have been on the ball on this one.

      Technically, Tesla would be required to remove all the vehicles without a Certificate of Conformity from the road, and either have them destroyed by an authorized dismantler, or export them outside of the United States. Tesla is lucky they are getting away with just a fine.
      • 5 Years Ago
      Since autoblog is now siting "huge fines" automakers have to pay, how come I didn't hear about Ford having to pay a $1million fine for the deaths of two workers, which the company plead guilty to?
      http://www.employmentlawtoday.com/ArticleView.aspx?l=1&articleid=2223

      Maybe it was covered, if so can someone post a link?
      • 5 Years Ago
      Do I understand this?

      Tesla Corporation knew the law and it complied in 2008.

      Tesla Corporation knew the law, but decided to flaut the law in 2009.

      Tesla gets caught and gets fined. That seems right.

      Yay, government regulators. Too bad eggs are not better regulated.
        • 5 Years Ago
        Lad,

        So you don't think electric cars are subject to EPA regulation 40CFR59 concerning "VOLATILE ORGANIC COMPOUND EMISSION STANDARDS" that apply to the paint on the vehicle?

        How about EPA regulation 40CFR261, regarding "HAZARDOUS WASTE", concerning what amount of the cars are recycleable?

        Are you under the illusion that the only thing the EPA does is sniff tailpipes?
        • 5 Years Ago
        The form should have been filed as necessary with a big "NA" across the front page. and "This form doesn't apply to cars without tail pipes."

        This is one of those problems that can be easily rectified by a rider on the next bill out of Congress...no need to attack all regulations and mount all those horses to ride against Washington when the problem can be fixed easily.
      BipDBo
      • 5 Years Ago
      Isn't it great that our elected government has set up all of these regulatory agencies so they can protect us from ourselves?
        • 5 Years Ago
        @BipDBo
        edit for my above comment:

        The driving force is profit and NOT consumer value.

        In theory, this value is supposed to dictate the market - but as mentioned above there is no check for fraud implicit in the pure market.
        • 5 Years Ago
        @BipDBo
        "testament to the absolute ludicrousness of the inflexibility ingrained in some of our regulatory bodies."

        Absolutely inflexible. It's RIDICULOUS to pay that money for something completely useless. Tesla shouldn't pay for this absurdity.
        BipDBo
        • 5 Years Ago
        @BipDBo
        I agree, we need balance. I work with a form of regulation; building codes everyday. For the most part these codes are a good thing. Government regulation is everywhere. Most conservatives believe that regulation has gone too far and that it needs to be reigned in. Most liberals would like to see more regulations, more fines and more employees on the federal payroll for these agencies. On this topic, as with most topics, I'm on the side of the conservatives. More importantly, though, as this story illustrates, regulation is all too often antiquated and stupid. Our regulatory agencies need to be more intelligent and less greedy.

        • 5 Years Ago
        @BipDBo
        No - it was a lot better when the 7 year old kids could work in the factories for 14 hours a day for a dollar a month, while the factory dumped heavy metal sludge in the river.

        Like everything, balance is needed.
        But the idea that regulation is a dirty thing which does nothing for us but impede us is pollyanna to the extreme.

        The idea that market forces would run everything great without them is absurd.
        It stems from the constantly reinforced misconception that a deregulated market is a free market (the two really have nothing much to do with each other).
        Compounding this is the fact that even in a perfectly free market, the driving force is profit and consumer value.
        It does not take into account in any way the consumer being misled about the value of the product or the behavior of the vendor.
        • 5 Years Ago
        @BipDBo
        Well said, Mike.
        • 5 Years Ago
        @BipDBo
        Quick note - conservatives aren't against regulation necessarily, but rather against federal regulation. Not that I agree with any of this or that - just stating a fact.

        Also if the R's want to parse down regs and the D's want more - then doesn't the constant back-and-forth keep us in the middle?

        Most automakers would love to have ONE standard and see CARB burn in hell. In theory the conservatives should support the idea of CARB as its a state based regulatory board, but they don't. Its a strange world we live in and I live in the middle of it in Washington DC.

        Thankfully I'm in the legislative defense world so I know very little about regulation ;)
      • 5 Years Ago
      These guys are in the car business, it's inexcusable they missed a step.
      • 5 Years Ago
      This post is sure to bring out the Randian Superheroes who long to live in a libertarian dream-world free of any regulation where they can sit in their safety-free air-polluting death wagons, crying softly while stroking a portrait of Ron Paul dressed as a minuteman. A bad use of a rule doesn't make the rule invalid, anymore then, say, a salmonella-tainted egg makes eating eggs always bad (to use just one recent case where regulation failed to do its job). This is obviously a case of the stupids breaking out in regards to what is a very solid and important rule. You know, the one that keeps car manufacturers from gassing us all, like they did for decades.
      • 5 Years Ago
      So the alternative would be that everyone in the industry would have to obtain certification or an official waiver... except if they totally promise that they're not doing anything bad, in which case its all okay and we just trust them?

      Yeah, I don't see that being abused at all...
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