Tesla knew its Model S cars were equipped with a battery-cooling system that had a flawed design in June 2012, as those cars started being delivered to customers, according to three people familiar with the matter and internal documents viewed by Business Insider. But the company sold the cars anyway.
The flaw in the design made the cooling system susceptible to leakage. Once coolant leaks into a battery pack, it can short a battery or cause a fire, industry experts told Business Insider.
This design flaw became a topic of urgent concern within the company in spring 2012, according to internal emails and documents viewed by Business Insider. And indeed, as cars were rolling off the production line and being delivered to customers in 2012, emails showed that Tesla employees were still concerned about the parts found leaking on the production line.
There were two main problems with the cooling system:
Tesla did not respond to Business Insider's detailed request for comment on these issues.
Both of these design flaws had the potential to cause leaks in the cooling system, meaning that the battery coolant could spill into a car's battery pack. Tesla continued to find leaking cooling parts — referred to as bandoliers or cooling coils — on its production line through the end of 2012, according to internal Tesla documents viewed by Business Insider. It is unclear when Tesla changed the design to prevent leakage.
The National Highway Transportation Agency is investigating whether Tesla Model S and Model X vehicles made between 2012 and 2019 had battery defects that could cause "non-crash fires." This came after a number of Tesla customers filed a petition complaining about a Tesla software update that limited the range their cars could drive on a single charge. Tesla made the update after a series of fires in 2019.
"Tesla is using over-the-air software updates to mask and cover-up a potentially widespread and dangerous issue with the batteries in their vehicles,"
consumer attorney Edward Chen alleged in a petition he filed to the National Highway Traffic Safety Administration last year.
Tesla has been dealing with
questions about the safety of its batteries for years. This is partly because the technology is new, and electric-vehicle fires are different from fires in traditional combustion engines. Because they're sparked by a chemical reaction, the fires can sometimes take
days to put out, re-sparking hours after emergency responders have left a scene. It's almost impossible to find the source of a fire once the battery has been destroyed. The fires can also start spontaneously. In 2019, fires randomly started in parked Teslas in garages in
San Francisco,
Hong Kong, and
Shanghai.
Jason Schug, a vice president at Ricardo Strategic Consulting who spent part of his engineering career at GM and Ford, told Business Insider he's done teardowns of Tesla's Model S and Model X vehicles, which share the same battery, as well as its Model 3. He told Business Insider that if coolant leaked into a battery module, it could render the battery useless.
"When we disassembled the Tesla Model X, a technician accidentally spilled coolant in the battery pack, and it sat there for a long time," Schug said. "There was no immediate danger, but when we removed the battery modules, quite a while later we found a lot of corrosion on the battery cells, and it was bad enough that some of the cells were leaking electrolyte. If this were to happen in the field and go unnoticed, it could result in bricking the battery."
"Bricking the battery" means that the battery would go dead.
Tesla did not respond to Business Insider's questions about its cooling system, batteries, or any possibility or impact of leaking fluid.
Schug also said that while the battery coolant itself is not flammable, the residue it leaves behind once it evaporates can be. This doesn't go for just Tesla but for all-electric vehicles. In 2017,
BMW recalled 1 million vehicles for fire risk.
"There was an incident with another manufacturer that a vehicle that had been in a crash test spontaneously combusted weeks later," Schug said. "Coolant had spilled in the battery during the crash, and when it evaporated, it left a residue which conducted electricity into a short circuit, which overheated the battery and triggered a fire."
All of this is to say that an electric battery's design must do everything possible to ensure coolant doesn't leak into the battery pack — at least not without notice. If it does, consequences can be incendiary. Tesla did not respond to Business Insider's questions about how it prevents leakage.
Cars, but make it Silicon Valley
The promise of Tesla has been not only to make electric vehicles sexy but also to do so the Silicon Valley way — faster and cheaper than everyone else.
So when it came time for Tesla to design the battery for the Model S, it looked to use parts that already existed so it could keep things simple. It settled on the 18-650 battery cell — a cell that it could buy off the shelf because it was already being manufactured for everyday use in things like laptops.
To make a battery pack, thousands of these cells are grouped into over a dozen modules — the number depends on the battery's range.
But there is an issue with having so many cells in the battery: If a single cell overheats, it can set off a chemical reaction called "thermal runaway," in which other cells also then overheat and catch fire in an act of "sympathetic detonation." This is why — as with the
case of the Tesla Model S that caught fire while it was parked in a garage in Shanghai in 2019 — it takes only one overheated cell or module to start the chain reaction that leads to a fire.
"There are really only a few reasons why a lithium-ion battery catches on fire," Brock Archer, an auto-extrication and fire-rescue expert,
told Business Insider last year. Those reasons are "liquid, dead short," or, for every one battery cell in 1 billion, "spontaneous combustion," he said.
Tesla was keenly aware of these issues with electric-battery chemistry, explaining in detail the steps its design was taking to mitigate this risk in a
battery patent filed in 2009. That is why — according to one former senior employee involved with the battery's design who spoke with Business Insider on the condition of anonymity for fear of retaliation — cell chemistry and battery structure were the company's main design concerns, cost aside.
The cell chemistry of the battery had to be precise to enable the car to reach long range and high speeds. And the car itself had to be designed to protect the battery at all costs in the event of a crash. This is because even a small amount of damage to a battery cell has the potential to set off this chain reaction, also known as "cellular propagation," when a temperature surge in one causes a chain reaction.
Because of the speed with which Tesla was going through the manufacturing process, it sometimes asked third-party suppliers to do research and development for the company, a former employee who left the company in 2018 said. Three former Tesla employees and two suppliers told Business Insider that this arrangement was not without friction. According to them, Tesla was sometimes dismissive of third-party suggestions, asked for more work than it paid for, and pushed suppliers to ramp up production volume at breakneck speed. These people, whose identities Business Insider verified, spoke on the condition of anonymity for fear of retaliation.
As Tesla's need for battery modules grew, so did its need for cooling coils. In the initial Model S battery design, the aluminum cooling coils wound around the battery modules and connected to the car using end fittings.
"When you're launching a new component, there's always going to be difficulties and issues on line during first launch and especially when you're Tesla and you're asking your vendors to launch with a limited R&D," a former employee who left in 2014 said. "We did have problems with it leaking."
'Hanging by a thread'
By the time Tesla started workshopping issues with the Model S's cooling coils, the car's launch was already behind schedule. In his book "
Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future," Ashlee Vance said that in an effort to get cars out of the factory as quickly as possible, Musk pulled employees from all parts of the business — from recruiting to the design studio — to sell as many cars as possible as fast as possible.
"If we don't deliver these cars we're f---ed," Musk said, according to Vance.
According to documents viewed by Business Insider, a few cooling coils were sent to a lab called IMR Test Labs in upstate New York in July 2012.
The results were not good.
According to the IMR report, which was reviewed by Business Insider, the end fittings on the cooling coils did not meet chemical requirements for a regulation-strength aluminum alloy. A source close to the matter said the results were shared with Tesla, but the Model S cars kept rolling out of the factory. According to
Tesla's 2012 third-quarter earnings report, the company delivered more than 250 Model S sedans.
In August 2012, the part was tested again. Tesla sent the part to Exponent, an engineering and scientific consulting firm. According to internal emails reviewed by Business Insider, Tesla was concerned because the end fittings on the cooling coils were just not staying together and as such were a source of leakage. One Tesla employee described them as "hanging by a thread" in August 2012, according to internal emails viewed by Business Insider.
The engineer who handled this at Exponent was a man named Scott Lieberman. He is now at LPI Inc. Lieberman declined to speak with Business Insider about this story. In internal emails between him and Tesla viewed by Business Insider, however, his opinion of the part was clear. He found defects — specifically, tiny pinholes that caused the leaks — on the tested materials after limited testing.
Tesla continued to find leaking coils in various stages of production through the end of 2012, according to documents reviewed by Business Insider. Some were found late enough on the production line to be described as a "critical quality issue," or were found to have leaked liquid into the battery pack, according to internal emails sent in October 2012, which were viewed by Business Insider. At this point, the problem had been flagged for senior management, documents indicate.
In another email sent in September 2012, employees mentioned that workers on the production line sometimes had to use a hammer to get the end fittings to stay together.
Tesla did not respond to Business Insider's request for comment about these emails.
The employee who left Tesla in 2014 said these issues were considered normal by Tesla standards. Unlike traditional automakers, Tesla didn't wait for new models to redesign parts. Instead, parts were constantly redesigned and deployed into vehicles, the employee said. On the other hand, the former employee also said the company had "plenty of investigations and countermeasures" to try to reduce leaks.
Tesla did not respond to Business Insider's questions about its design process or the countermeasures it used to reduce leaks in this part.
The former employee who left the company in 2014 said the bends in the aluminum "made it more fragile" and that the end fittings were still sometimes forced together as they rushed to make production goals, causing leaks.
"We did find a few vehicles," the former employee said of cars that had leaks. "I don't know exactly how many, but again that is what I would consider normal for a company that decides to launch with a limited amount of R&D in the hopes of: 'We will launch with this, and we will put inspections in place that we catch it at the plant.'"
That, the former employees said, is just how things were done at Tesla.
It is not at all how a design flaw would be dealt with at a traditional automaker, like Toyota, according to Jeffrey Liker, a professor of industrial and operations engineering at the University of Michigan. He's the author of "
The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer."
Liker said automakers like Toyota front-load their manufacturing process. They put a lot of resources in preparation by creating and stress testing prototypes for new parts and then having a pilot production period to catch any flaws before the manufacturing process begins in earnest. Of course, 80% of the parts in most Toyota vehicles are from previous designs. Tesla, on the other hand, was designing an entirely new car — a process referred to in the manufacturing world as "clean-sheet design."
And when you start with a clean sheet, you have a lot more room for the innovation Tesla has brought to the table, but also a much higher risk of design flaws or production problems, Liker said.
"Every part of the vehicle was breakthrough innovation, so it was almost guaranteed there would be serious production problems," Liker said. "It's a trade-off, Musk could've been more conservative, but then what would be his competitive advantage?"
Tesla's processes
To try and understand how the company's production processes had changed since 2012, Business Insider reached out to three former Tesla employees who worked at the automaker at different times.
While none of them were able to confirm the extent of issues with the cooling coil, they all said Tesla was still an incredibly fast-paced place to work and that designs were in constant flux.
"Tesla is always driven by production, so sometimes if the issue isn't appearing for a customer, they'll just continue rolling out cars. It's as simple as that," an engineer who left the company in 2018 told Business Insider, referring to his general experience with the company.
Another employee who spent over a decade working for NUMMI (the Fremont, California, factory jointly owned by Toyota and General Motors that Tesla purchased) and four years working for Tesla told Business Insider that his experience at Tesla was very different from his time at NUMMI.
"Toyota did not rush through things like Tesla did," the employee who left in 2017 said. The same employee also said that though parts were tested rigorously, the workers testing them did not receive the same extensive training they would receive at NUMMI. There simply wasn't time, and Tesla's Silicon Valley engineers didn't want to hear much about how things were done at NUMMI, the former employee said.
"When I was hired they said they didn't want to hear about NUMMI or Toyota. 'We're a high-tech company, not an auto company,' they told me," the former employee said.
The former employee said the frequent changes in design created disruptions in Tesla's supply chain — upsetting suppliers — and wasted money and materials.
"Engineers would make a modification or change or something, and they would switch over to that," they said. "Then Tesla would have a truckload of products from the old style that they would waste ... that's how they run."
All three former employees said disruptions in the supply chain were wasteful for the company. One employee who worked at Tesla during the Model S launch said the joke inside Tesla was "that if you lined up the first maybe 10,000 Models S VINs, every single one would be different."
But this employee doesn't think any of that detracted from the work Tesla did.
"I think it's common in every auto company that vehicles are released with design flaws," the former employee said. "It's called running design changes."
Those design flaws, the former employee said, were what made room for Tesla's constant innovation at breakneck speed. Besides, the person said, Tesla's early adopters weren't really buying a car.
"It's my understanding that every customer back in 2012 was buying faith in Tesla. They weren't expecting a perfect car," the former employee said.
www.buzzfeednews.com
www.businessinsider.com
www.thedailybeast.com
