Everyone agrees that there should be scrap. The controversy was with respect to the amount - allegedly hundreds of millions of dollars, Tesla said much less. Tripp seems to have published some documentation now for the greater amount. Could have been falsified, I suppose...
7 1/2 billion in revenue in the quarters of 2018 before Tripp (now demonstrably) copied their internal servers, and that's supposed to be some horrific amount of scrap (he showed, what, $160M total, assuming that's legit)? Come on.
Scrap goes under COGS. Gross margin is revenue minus COGS, over revenue. Hence, scrap lowers gross margin. And hey, whatdyaknow, Tesla started out with very negative gross margins on the Model 3, went to somewhat negative, now to slightly positive, and soon very positive. Because in all manufacturing processes, when you're ramping up a new line, you have high levels of scrap, which decreases as you refine the process.
He also - very strangely - seems simultaneously mad about defective parts being thrown away, and about defective parts being refurbished. I'm not sure what exactly he wants - except perhaps for a new manufacturing line to pop into existence without generating any scrap when producing billions of dollars of hardware?