Tesla Confirms Model 3 Supply Deal With South Korean Company By Slapping It With $1 Million Breach Of NDA

SEP 1 2016 BY ERIC LOVEDAY 76

Tesla Motors

Tesla Motors

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Tesla Logo

Tesla Motors has indirectly confirmed a Model 3 supply deal with an undisclosed South Korean company.

Korea Herald is reporting that Tesla slapped a “major Seoul-based supplier” with a $1 million fine for breaching a non-disclosure agreement. This confirms that an agreement was signed and that Tesla is unhappy with the leak from the South Korean supplier.

Although it’s unclear which supplier has been fined, our guess would be that it’s Mando, a supplier of suspension, steering and brake systems based in Seoul, South Korea, or even steelmaker POSCO also based in South Korea.

Tesla previously denied any connection to Mando in relation to the Model 3, but we do know that Mando already supplies some components for the Model S, so the tie is already there, while POSCO also found itself in the news connected to the Model 3, although it denied making any contracts surrounding that vehicle.

Korea Herald states that other Korean suppliers had their wrists slapped by Tesla in the form of a verbal warning:

“Just recently, a major Seoul-based supplier was slapped with a US$1 million penalty by Tesla for breach of a non-disclosure agreement, while several others received verbal warnings for revealing information to the media here about a possible deal.”

Why the leaks? Well, the South Korean suppliers are eager to get their name out there by tying up with Tesla, but the electric automaker isn’t so keen on the world knowing what’s going on prior to an official announcement.

Source: Korea Herald

Categories: Tesla

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76 Comments on "Tesla Confirms Model 3 Supply Deal With South Korean Company By Slapping It With $1 Million Breach Of NDA"

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Not to sound like a particular presidential candidate, but why can’t we make cars in this country?

Are you saying Tesla doesn’t make cars in this country?

Under 55% N. American content.

We have two Hondas that are 70% to 80% N. American content.

That’s mostly because the batteries are made in Japan. The percentages will improve once GF1 is online.

Not that I’m an expert on this subject, but I’ve read repeated claims that the Model S would be the “most made in America” car if it wasn’t for the fact that it uses batteries made overseas. That will of course end when the Gigafactory goes into production.

If Tesla will be using a higher percentage of imported parts for the Model ≡… well, that’s unfortunate, but perhaps understandable given the need for lower costs. Much as I’d like to see a 100% American-made car, Tesla has to operate in a highly competitive market, and if they can get cheaper parts from Asia, then I suppose that is unavoidable. Making the Model ≡ 100% American made, but making it so expensive it can’t compete in the market, wouldn’t benefit anyone.

Yeah, the way supply chains are these days, pretty much no car is 100% from anywhere.

Well, if you do not want to buy our parts, why should we buy your cars?

Every “auto maker” on this planet gets Parts made from all over the this Planet…so Give it a rest ! As long as they’re “NOT”from Mexico they are all good Suppliers …

How many people do you think even understand what the percentage of American parts means? Does it mean the number of parts made in the US/total # of parts, and if so, does a brake booster count as one part or many? Does it mean they weigh each part so they can calculate the percent of the physical makeup of the car that is from US parts? Do they figure out how much each part costs and add them up for US parts, do the same for foreign parts and then compare the US value to the total value? The answer is the final one. It goes by value. I have no idea how many people know that. But how to you compute value? If Tesla stamps out the entire body in their factory, does it go by the cost of the materials, or do you get to add the cost of the labor to finish and assemble the body when calculating the value? Labor definitely gets factored in for foreign parts. But labor is supposed to be calculated as a separate percent of time by man-hour to assemble the vehicle. So should a manufacturer add the cost of labor… Read more »

So, is it fair to summarize this as follows?

The percentage of American made parts cited by anyone is at best only an estimate, and perhaps a rough estimate at that.

Personally, when I see a claim that X percent of a given car is made in America, it always reminds me of the saying “Did you know that 36% of statistics are made up on the spot?” 😉

Because the world wants and needs a $35,000 long distance ev. not another $100,000 luxury ev

If you mean parts, you should study David Ricardo’s comparative economic advantage. Everyone benefits when countries / companies focus on their core competency, whether via lower cost or better product.

I believe Adam Smith was a bit earlier with that concept. It’s the main point he made in The Wealth of Nations.

A much-abused book by the way in today’s crony capitalism. The father of capitalism was no fan of even the capital concentration of the time – and it has become much more extreme since:

“All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind.”

Chapter IV, p. 448.

Fascinating…I’ll have to read that some day…have been turned off by modern trends in Capitalism too much to be willing to give Smith a just hearing.

Tesla is the largest manufacturing employer in California. That’s quite a feat, considering what a PITA it is to manufacture here.

All of the global manufacturers source parts from various countries and some of the foreign manufacturers use a higher percentage of American parts than American car companies.

I bought an F-150 a while back and discovered it was made in Canada. If I had bought a Tundra or a Titan, it would have most likely been made here.

You lost me forever at “I bought an F-150”.

??

Sorry Terawatt, but I wasn’t trying to gain anyone’s admiration with my F-150 purchase. It was a company truck reimbursed for by my employer to haul equipment around. I kept it when I left the company. I chose the F-150 because it got great gas mileage, even better than the mini-trucks of the era.

I haul, tow, go off-road, carry six passengers, drive long distances and sleep in the camper shell regularly. You can’t do that in a LEAF. That’s why the F-50 has been the best selling vehicle in America for 40 years. It has very few limits. When Tesla makes a pickup or Ford makes a PHEV truck, I will gladly trade it in. Until then, I can’t do without it.

Because it is incredibly more expensive. It’s all about money

Tesla has the most percentage of the parts done in USA, even more than the Ford 150.

http://www.fool.com/investing/general/2014/07/04/the-most-american-made-car-soon-to-be-tesla-motors.aspx

It’s not what you think. Back in late 80s, I needed a cheap car so I bought a Hyundai. At that time, the car was made in S. Korea, but actually had something like 1/3 American made parts. Why? Because it was cheaper AND allowed Hyundai to penetrate the American market. The car itself was built so-so, and I would be safer on a Honda holding if in an accident, but it was dirt cheap.

Tesla needs to penetrate asian markets that not only have illegal trade barriers,manipulates money, but also the citizens buy national.
So by having some 10% parts from that nation, when Tesla sells it, they tell locals the nation is helping.

However, in future, the parts will be brought in-house. Btw, Hyundai are now almost 100% Korean made. If you look at model S, the original seats were made in Europe. Now they are in-house.

Nothing like starting out a critical relationship on the right foot by fining your partner a million dollars. No harm can come of that; in fact, it will pay dividends long term, for sure.

NDAs are a big deal. They have to have teeth. I can’t see anything wrong here. I am sure that Tesla carefully weighed the value of the contract and charged a fine that would not threaten it.

But . . . but . . . but . . . Elon/Tesla said that the NDAs it forced customers to sign when getting complimentary post-warranty repairs or getting a Lemon Law buyback had no teeth and it would never dream of enforcing them. Those NDAs for lemon law buy backs were particularly intimidating, since they contained a liquidated damages clause equal to the amount Tesla paid to buyback the lemon car.

How does one discern which Tesla NDAs are ones that Tesla intends to enforce, and ones it doesn’t intend to enforce and uses them only as a scare tactic? ¯\_(ツ)_/¯

It’s a good thing you wont ever be a Supplier, Employee, or Customer to worry about it.

Nope, I’m a potential customer if Tesla builds an SUV/CUV without falcon-winged doors that can handle some light off-road driving, and doesn’t make me sign any NDAs.

Maybe someday we’ll run into each other at a Supercharger station. 😀

Honestly, I can’t see you being able to handle it, if you continue to freak out over literary non-relevant inconsistencies, vs actual issues over a gen one Tesla vehicle.

What will you do Sven, if your vehicle needs service? Blog how horrible Tesla is to every EV Site on the net, then shoot everyone at the servce center???

That would require him to do something other than complain….

He might do that, but you would most certainly never admit that your Tesla had a problem in the first place. Or would you be honest? Somehow I don’t see that happening, based on your posting history.

NDA in this case still doesn’t apply to government regulation or investigation.

And again, Tesla was under no obligation for out of warranty repairs. And Tesla isn’t the only ones using NDA’s for lemon law buy-backs.

I use NDA’s all the time and expect them to be enforced and to bound by them.

It’s a common tactic for perpetual Tesla bashers (like sven) to talk about or highlight perfectly normal and widespread business practices as if they’re somehow an indication that something is wrong or at least odd at Tesla Motors, merely because Tesla is using that business practice.

NDAs are perfectly normal in business. In fact, I can’t remember the last time I took a job where I did *not* have to sign an NDA.

Tech01x said: “And Tesla isn’t the only ones using NDA’s for lemon law buy-backs.”

Really? Then you’ve been duped. If a car meets the criteria under a state’s Lemon Law that requires the automaker to buyback the car, then the automaker cannot refuse to buyback the car if the owner refuses to sign the automaker’s NDA.

Any automaker that requires a car owner to sign an NDA for a statutorily required Lemon Law buyback is trying to trick the car owner into thinking they can’t tell anyone they bought a Lemon from that automaker. The NDA would probably be unenforceable as it is against public policy.

If you have no problem signing away or giving away your rights,

. . . away your rights for no reason and for no compensation, then that your prerogative. But I wouldn’t do it.

sven said:

“Any automaker that requires a car owner to sign an NDA for a statutorily required Lemon Law buyback is trying to trick the car owner into thinking they can’t tell anyone they bought a Lemon from that automaker. The NDA would probably be unenforceable as it is against public policy.”

I guess you never heard of an out-of-court settlement? Those often include NDAs; in fact, I don’t think it would be overstating the case to say that out-of-court settlements usually include an NDA.

Of course, being a serial Tesla basher, you will as usual try to paint that perfectly standard business procedure as an indication that something is “wrong” at Tesla Motors.

What a troll.

Your reading comprehension sucks Poo-poo. 🙁 I specifically said “statutorily required Lemon Law buyback,” not an out of court settlement.

If you’re settling out of court, then it’s not a Lemon Law buyback, the Lemon Law protections/provisions doesn’t apply, and the car’s title isn’t legally required to marked as a Lemon Law buyback.

What an obnoxious troll.

sven said:

“Your reading comprehension sucks Poo-poo.”

Infantile, bodily-function name calling probably isn’t going to help convince anyone you’re being reasonable, let alone right.

“I specifically said ‘statutorily required Lemon Law buyback,’ not an out of court settlement.”

Yes, you very specifically — and rather obviously — ignored the fact that a lemon law case isn’t a criminal matter, but a civil one; so if you want to assert your rights under that law, then you have to take the auto maker to court.

It’s incredibly insulting to your readers to assume we are so clueless that we don’t know that.

And it shouldn’t be necessary to point out to you that filing suits often lead to out-of-court settlements, altho I realize your Tesla-hater reality distortion goggles often make it difficult for you to see what is obvious to nearly everyone else.

http://californialemonlawgroup.com/arbitration-vs-lemon-law-cases/

Is it really that hard to admit, you were simply wrong in this particular argument?

What is it with you pro-Tesla people, why can’t you be objective once, once, in a while?

I thought perhaps you were just another anti-Tesla troll when you accused “Anon” of being dishonest.

Now I’m sure of it.

And no, I wasn’t wrong at all. Last time this was discussed on InsideEVs, I actually believed it when some said it’s unusual for auto makers to use NDAs for out-of-warranty repairs. This time I know better. This time I know it’s the usual industry practice.

And in case anyone reading this still thinks that an auto maker asking a customer to sign an NDA for an out-of-court settlement is anything unusual, just read the post linked here:

https://teslamotorsclub.com/tmc/threads/suspension-problem-on-model-s.69204/page-43#post-1577405

sven asked:

“How does one discern which Tesla NDAs are ones that Tesla intends to enforce, and ones it doesn’t intend to enforce and uses them only as a scare tactic?”

I’m sorry you are unable to distinguish between Tesla’s suppliers and Tesla’s customers.

One suspects Tesla doesn’t have your problem with perception.

Yet Tesla requires both its suppliers and customers to sign nondisclosure agreements.

Tesla, just like all auto makers, requires a customer to sign an NDA when Tesla chooses to perform an act of “good will”, to repair a car out of warranty.

To normal, rational people, this is perfectly understandable. Auto makers, just like any company, don’t want people running around saying “They repaired my product/car out of warranty, so they should repair yours too!” That would lead to bad feelings among customers who didn’t get that “good will” repair. Ultimately, it would endanger the very idea of there being a cutoff date for any warranty, if auto makers were pressured into making out-of-warranty repairs a standard thing.

But of course, serial Tesla bashers like you are neither normal nor rational. You’ll look for any excuse to bash Tesla, no matter how unfair or untruthful your FUD is. Truth is entirely irrelevant to your agenda of damaging Tesla’s public reputation as much as possible.

Nope. Absolutely false. Auto makers usually do NOT require a customer to sign an NDA when they approve their dealer to perform a “good will” repair to a car out of warranty.

Jeez, sven. You know perfectly well that several people pointed out to you that this is factually incorrect, the last time you asserted that.

I guess you’re hoping to fool people who didn’t read that discussion. What a troll you have become.

sven will never admit he’s wrong, but anyone wanting to see the truth about this can read it here, in a first-hand report:

https://teslamotorsclub.com/tmc/threads/suspension-problem-on-model-s.69204/page-43#post-1577405

NDAs are mostly bs the world would be better without. Imagine if corporations had to operate transparently! Obviously they will tell us nothing could possibly work and the world would end, but they always say that if it helps get it their way. By and large, it does more harm than good. Patents were originally invented not to protect private IP, but to make sure it would become public knowledge. It is a “full disclosure agreement”. Without protection inventors tried to keep their secrets, retarding progress. Now they file a patent which immediately becomes a public document. No one else can use the invention without paying for a license (or buying the patent) for many years, but researchers can build on new ideas without delay – and develop new patents. It is also true that things like pharmaceuticals, where development costs are huge but pill production dirt cheap, wouldn’t attract investment unless there was a temporary monopoly to make it possible to recoup the development costs. But even this clever patent system, far better than NDAs, is riddled with problems. Software patents for instance do nothing but enrich lawyers and retard progress. In many other areas it should have been… Read more »

Terawatt said:

“By and large, it [an NDA] does more harm than good.

Not when it comes to the company agreeing to repairs out of warranty, it doesn’t. If companies were force to publicly admit it whenever they did such an act of good will, then they’d simply stop doing them. No company can afford to get a reputation for giving special treatment to some, but not others. In the case of “good will” out of warranty repairs, the NDA benefits both the company and the customer.

The choice in such a case isn’t between the customer being able to tell others about the company giving them an out-of-warranty repair, or having to keep silent about it. The choice is between the customer having at least the possibility of talking or pressuring the company into giving them such a repair, or not having even the remotest possibility of ever getting the company to agree to do that.

In business money talks louder than words.

This kind of posturing (along with accelerated cash burn) implies to me, that the Model 3 Line will be producing cars, hell or high water, 4th Q 2017.

Yeah, the big takeaway is that the fear mongering in the financial and automotive press that is speculation that Tesla cannot possibly make a 2017 launch of the Model 3 is just a bunch of hot air.

Absolutely, Tesla already forwarned suppliers who bid that it would brook no delays or other problems if they wanted to be in on this massive program.

Meanwhile, the relatively small number of shorters/haters are getting desperate as their posts under multiple usernames shows us as the days tick off to production.

I would just stop working with Tesla after this move, if the have any honor down there…

And that is why you are not in the parts business

Hmmm, one might suggest that if the company had “honor”, they wouldn’t have violated the NDA. Which is, in case you forgot, a formal promise to keep mum.

And that NDA no doubt had a penalty clause. The mistake would be for Tesla to not enforce that clause. That would definitely be sending the wrong signal to other companies; it would signal that Tesla didn’t really care if they violated the NDA or not.

Thanks for showing us that you have no honor vadik or whoever else you post as!

Spoken like an ignorant Klingon. 😉

Learn what an NDA is, then understanding the consequences of breaking one, will suddenly become clear to you. 🙂

“There is no honor among thieves”.

The LG Bolt, and the LG Model 3. I am sure next is the LG Leaf.

You must be psychic – because Nissan already has signed up with LG Chem as a supplier and it has been in the press.

Now we have the Panasonic-Mando Model 3.

That’s Tesla innovation for you.

The spectre of profit, scare ya? 😉

Sounds like a Chevy Bolt.

Except the Chevy Bolt is slower, more expensive, less efficient and has a much higher CoD.

I’m not hating on the Bolt either. It’s a great looking car with solid performance and I hope GM sells a lot of them. They are the only ones even close in the 200 mile / $35K range and will be on the market first. Car companies have a long way to go in order to catch up to Tesla. At least GM and LG Chem. are giving it a full effort.

Good luck on shorting Tesla stock. 🙂

Said the F-150 driver.

He’s proof that people can change, when there is a valid option. Why do you see that as a negative?

Or he actually needs a pickup truck for his trade/professionas opposed to using it

primarily as a commuting vehicle to a white collar office job.

Terawatt said:

“Said the F-150 driver.”

People who drive gasmobiles are not evil, nor are they the “enemy”. They are all potential recruits for new PEV drivers. Let us please remember that.

The only enemy we EV advocates have are EV bashers and shills for Big Oil & Gas.

Wow … someone hacked your account, or is it really you posting??

I’ve got a suspicion on the connectian , … Teslamando should came clean on this…I’ve long thought there was insider information invalved in his posts.

I thought it was the Kool Aide.

One mans Kool Aide, is anothers Champagne… 😉

Many car companies get parts from overseas companies. Nothing new. As long as they are making electric cars, more power to Tesla. Have a great day!

Well, that is one way to raise some cash for a cash strapped company….

=)