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Tesla responds to allegations of unjust pay and visa violations
Tesla has issued a response to this weekend’s report that a factory worker who worked on the company’s high-volume paint shop at Fremont, CA plant was part of a group of foreign workers that were paid $5/hr and operated outside the terms of their visas.
The story has gained attention after the San Jose Mercury published a report of its recent investigation on Gregor Lesnik’s suit against the electric vehicle maker and several other defendants for unfair treatment in a workplace. The Mercury reports that a Slovenian company called ISM Vuzem flew Lesnik and a group of foreign workers to the U.S. while housing them in “nondescript apartments” where they would be shuttled from and to the Tesla plant to work six to seven days a week at low wages.
Among the claims in the lawsuit via the Mercury:
- Eisenmann USA wrote letters to the U.S. Embassy on behalf of Lesnik and as many as 200 foreign workers stating they would supervise employees at a U.S. auto plant. Most of the Vuzem workers were nonsupervisory laborers and tradesmen.
- Tesla issued company security badges to the foreign workers, recorded their time on site and shared responsibility for setting safety conditions.
- Vuzem required foreign employees to regularly work between 60 and 70 hours a week. Vuzem paid Lesnik an average of 800 euros per month, or about $900, for a rate of less than $5 per hour. Lesnik was promised an equal amount when he returned home, but the company never paid the balance.
- The companies violated wage and employment laws and benefitted from the cheap labor of foreign workers. Workers were promised $12.70 an hour based on a standard workweek. The suit estimates they are due $2.6 million in overtime and premium pay.
Tesla has issued a response to the story defending their stance that the company operated within legal limits stating that Lesnik’s claim is a moral issue at heart, but the company will see to it that the right thing happens and all are treated fairly should the claims be true.
According to Tesla’s issued response, Lesnik’s accident as a result of slipping on loose tile and falling three stories while working on the company’s high-volume paint shop, was investigated by the government regulator that oversees workplace accidents (Cal/OSHA) and found to be not at fault of the company. Tesla’s statement says, “When Mr. Lesnik brought a workers compensation case, Tesla was dismissed from the case because the judge concluded that we had no legal responsibility for what occurred.”
Here’s a copy of Tesla’s full response to the story.
“At Tesla, we aspire to operate on the principles of hard work and exceptional performance, but always tempered by fairness, justice and kindness. There are times when mistakes are made, but those are the standards to which we hold ourselves. With respect to the person at the center of this weekend’s article in the Mercury News, those standards were not met. We are taking action to address this individual’s situation and to put in place additional oversight to ensure that our workplace rules are followed even by sub-subcontractors to prevent such a thing from happening again.
Gregor Lesnik was brought to the Tesla factory by a company called ISM Vuzem, a sub-contractor brought in by Eisenmann, the firm that we hired to construct our new, high-volume paint shop. We contracted with Eisenmann for the simple reason that we do not know how to build paint shops and they are regarded as one of the best, if not the best, in the world. In our dealings with them, we have found them to be an excellent company, run by good people.
The article describes how Mr. Lesnik came to this country, the conditions under which Vuzem employed him and others to do their work, and how Mr. Lesnik ended up being injured while on the job. Assuming the article is correct, we need to do right by Mr. Lesnik and his colleagues from Vuzem. This is not a legal issue, it is a moral issue. As far as the law goes, Tesla did everything correctly. We hired a contractor to do a turnkey project at our factory and, as we always do in these situations, contractually obligated our contractor to comply with all laws in bringing in the resources they felt were needed to do the job.
Regarding the accident that resulted in Mr. Lesnik being injured, Cal/OSHA (the government regulator that investigates workplace accidents like these) came to our factory, investigated the incident and found that Tesla was not responsible. When Mr. Lesnik brought a workers compensation case, Tesla was dismissed from the case because the judge concluded that we had no legal responsibility for what occurred.
All of that is fine legally, but there is a larger point. Morally, we need to give Mr. Lesnik the benefit of the doubt and we need to take care of him. We will make sure this happens. We do not condone people coming to work at a Tesla facility, whether they work for us, one of our contractors or even a sub-subcontractor, under the circumstances described in the article. If Mr. Lesnik or his colleagues were really being paid $5 an hour, that is totally unacceptable. Tesla is one of the highest paying hourly employers in the US automotive industry. We do this out of choice, because we think it is right. Nobody is making us do so.
Tesla will be working with Eisenmann and Vuzem to investigate this thoroughly. If the claims are true, Tesla will take action to ensure that the right thing happens and all are treated fairly.
Creating a new car company is extremely difficult and fraught with risk, but we will never be a company that by our action does, or by our inaction allows, the wrong thing to happen just to save money.”
It is safe to say SpaceX won’t be going for electric rockets anytime soon.
In a characteristically blunt reply on X, SpaceX frontman Elon Musk stated, “Unfortunately, electric rockets are impossible,” following reports that MSCI had assigned SpaceX its lowest possible ESG rating of CCC.
The assessment, issued just this past week, coinciding closely with SpaceX’s public market debut, placed the company on par with nations like Russia in sustainability scoring and cited significant risks in environmental, social, and governance areas.
MSCI flagged SpaceX’s exposure to rocket emissions and other operational impacts, alongside governance concerns such as concentrated control by Musk and limited shareholder protections. Musk’s terse comment directly addressed the environmental pillar, underscoring a core physical constraint that ESG frameworks often overlook when evaluating high-thrust industries.
Unfortunately, electric rockets are impossible
— Elon Musk (@elonmusk) June 21, 2026
Electric propulsion systems do exist and are widely used in space. Ion thrusters and Hall-effect thrusters accelerate ionized propellant, typically xenon or krypton, using electric fields, achieving very high specific impulse, often exceeding 3,000 seconds compared to roughly 300–450 seconds for chemical rockets.
This efficiency makes them ideal for satellite station-keeping, orbit raising, and deep-space missions where low thrust over long durations is sufficient. SpaceX’s own Starlink satellites employ electric propulsion for these purposes.
However, launching from Earth’s surface demands something entirely different: enormous thrust delivered rapidly to overcome gravity and atmospheric drag. A typical orbital-class booster must generate thrust far exceeding its weight, often in the millions of Newtons within seconds.
Chemical rockets achieve this through exothermic combustion of dense propellants, producing high-mass-flow, high-velocity exhaust. Electric systems, by contrast, expel very small amounts of mass at extremely high speeds. Generating equivalent thrust would require impractical onboard power levels, massive energy storage or generation systems, and prohibitive added mass, rendering the approach infeasible with current or near-term technology.
Musk has previously expressed a similar sentiment, noting a desire for electric orbital rockets while acknowledging the inescapable requirements of Newton’s third law and energy delivery. The distinction is clear: electric propulsion excels once a vehicle is already in space; it cannot replace the high-thrust chemical phase required to reach orbit from the ground.
The episode illustrates broader critiques of ESG ratings. Proponents argue they incentivize better risk management and long-term sustainability. Detractors, including Musk—who has previously called ESG a “scam”—contend that such metrics can penalize essential activities when no practical alternative exists, potentially discouraging innovation in sectors like space access.
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SpaceX has sought to mitigate launch-related impacts through reusability: Falcon 9 boosters have flown more than 30 times in some cases, dramatically lowering the manufacturing and emissions burden per kilogram delivered to orbit. Starship’s design further emphasizes rapid reusability and methane propellant, which can theoretically be produced via sustainable pathways.
Ultimately, Musk’s remark serves as a reminder that certain engineering realities persist regardless of scoring systems. As humanity expands its presence in space for communications, science, and exploration, balancing genuine environmental progress with technological necessity remains a central challenge.
ESG frameworks may evolve, but the fundamental limits of electric launch propulsion are unlikely to change soon.
Tesla just trademarked ‘MEGAPOD’ with the United States Patent and Trademark Office (USPTO), its latest move in what seems to be a hint that the company is incredibly focused on its AI efforts and storage needs as compute increases.
The application carries serial number 99893717 and lists the applicant as Tesla, Inc., located at 1 Tesla Road, Austin, Texas 78725.
The filing remains in ‘live pending’ status, and it is a new application waiting for assignment to an examining attorney. It has not yet been published or registered.
Tesla just trademarked MEGAPOD
Summary:
“Modular data center hardware systems for artificial intelligence computing, comprised of computer servers, computer hardware for artificial intelligence processing, computer networking hardware, electrical power distribution units, and… pic.twitter.com/3l85DsKadl— Robin (@xdNiBoR) June 19, 2026
According to the official goods and services description in the application, Tesla describes ‘MEGAPOD’ as:
“Modular data center hardware systems for artificial intelligence computing, comprised of computer servers, computer hardware for artificial intelligence processing, computer networking hardware, electrical power distribution units, and cooling systems, sold as a unit; self-contained modular computing hardware systems for artificial intelligence workloads; integrated computer hardware platforms for artificial intelligence computing, namely, enclosures containing computer hardware, power distribution hardware, and cooling hardware, sold as a unit; downloadable software for monitoring, managing, optimizing, and regulating modular artificial intelligence computing hardware systems.”
This description specifies complete, self-contained modular units that integrate servers and specialized AI processing hardware with networking components, power distribution, and cooling systems. It also includes associated downloadable software for oversight and optimization of these systems. The language emphasizes hardware sold “as a unit” and enclosures that combine the necessary elements for AI computing workloads.
Tesla has an established history of developing and commercializing modular hardware systems. Its Megapack product line, for example, consists of utility-scale battery energy storage systems designed as containerized units for grid applications. The MEGAPOD filing follows a similar pattern of protecting a name for modular, integrated hardware platforms, this time focused on artificial intelligence computing infrastructure.
This could be an early move, especially as Tesla did not have trademark rights to the word ‘Cybercab,’ the name of its self-driving, ride-hailing-focused vehicle.
Trademark applications of this type allow companies to secure priority rights to a name for defined categories of goods and services. The USPTO examines applications for compliance with legal requirements, including distinctiveness and absence of conflicts with prior marks. If the application proceeds successfully through examination, publication, and any opposition period, it could result in a federal trademark registration providing nationwide protection. This is what Tesla’s obvious intention is with ‘MEGAPOD.’
Public reports and analysis suggest MEGAPOD could represent modular, container-style AI computing pods designed for easy deployment. These would bundle servers, AI accelerators, power systems, and cooling into self-contained units suitable for distributed AI workloads. This approach aligns with Tesla’s announced AI compute strategy.
In March 2026, Elon Musk outlined plans for “Digital Optimus” (also referred to as Macrohard), a joint Tesla-xAI project for AI agents capable of handling complex digital tasks. The plans include running these agents on Tesla’s AI4 hardware in parked vehicles as well as dedicated compute units installed at Supercharger stations, which collectively offer substantial unused electrical capacity.
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A modular hardware platform like the one described in the ‘MEGAPOD’ filing would support scalable, rapid deployment of such distributed compute resources. It could complement Tesla’s other AI infrastructure efforts, including the Dojo supercomputer used for training models and the development of AI systems for autonomous driving and robotics, by enabling edge or regional AI inference without reliance on traditional centralized data centers.
Investor's Corner
SpaceX is launching a secret spacecraft that could change how things are made in space
SpaceX’s secret disk-shaped Starfall capsule is targeting a market no reentry vehicle has cracked.
SpaceX is targeting Tuesday, June 23 for the first flight of Starfall, a reentry capsule the company has developed almost entirely in private. The Falcon 9 launch window opens at 6:43 a.m. ET from Space Launch Complex 40 at Cape Canaveral Space Force Station, with a backup window available the same time on June 24. SpaceX has made no public announcement about the vehicle, only providing launch details. Everything known about it has come through FAA and FCC regulatory filings.
What makes Starfall different starts with its shape. Rather than the traditional cone used by Dragon and every other cargo return capsule in operation, Starfall is a flat disk that measures roughly 10.2 feet (3.1 meters) wide and just 2.5 feet (0.75 meters) tall, and weighing 4,630 pounds (2,100 kg) and capable of returning up to 2,200 pounds (1,000 kilograms) of payload from orbit. The disk geometry maximizes structural efficiency and payload volume relative to mass, and the heat shield mechanically jettisons just before splashdown, allowing recovery teams to retrieve both the capsule and the shield separately from the Pacific Ocean.
The difference with Starfall from existing competitors, such as Varda Space Industries, which has largely built the orbital manufacturing market and returns heavy payloads per flight is that Starfall’s specification is roughly 30 times more per mission, and is designed to be mass-produced and launched on either Falcon 9 or Starship. That combination of volume and launch access is something no standalone startup can replicate, and it puts SpaceX in direct competition with the companies that currently pay it to reach orbit.
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The intended market is orbital manufacturing: pharmaceuticals, protein crystals, semiconductors, and advanced optical fiber that physically cannot be produced in the presence of gravity. FAA documents describe Starfall’s long-term purpose as building a “self-sustaining commercial in-space manufacturing market” and as a potential successor to the industrial capabilities of the International Space Station, which is set to retire in the late 2020s. Military rapid global cargo delivery is a parallel application under active discussion with the Pentagon.
The reason some industries seek manufacturing in space comes down to gravity. On Earth, gravity causes materials to settle, separate, and deform during production. In microgravity, those constraints disappear.
SpaceX’s already controls launch access, which means it currently functions as the landlord for every competitor in the orbital manufacturing return space. Starfall converts that landlord position into vertical ownership, and it would no longer just carry other companies’ capsules to orbit, but rather operate the capsule, own the return logistics, and capture the service revenue directly. Viewed alongside Starlink, Colossus, and the xAI merger, Starfall fits a consistent pattern: SpaceX identifying infrastructure layers that others depend on and moving to own them outright. Orbital manufacturing return is the next layer on that list.
If Tuesday’s reentry, parachute sequence, and recovery demonstration goes as planned, the second FAA-approved test flight follows. A successful pair of demos would position SpaceX to begin offering Starfall as a commercial service, likely first to pharmaceutical and materials science customers before scaling toward the military and broader manufacturing segments.
Elon Musk responds to SpaceX’s ESG rating and says its rockets won’t go electric
Tesla just trademarked MEGAPOD: here’s what it is
