FBI Now Probing Lofty Tesla Production Promises
Given that Tesla CEO Elon Musk’s Twitter account now has third-party oversight, it’s unlikely we’ll see angry missives about the Fun-Busting Interrogators this weekend. However, that won’t stop the FBI from probing Musk’s past production promises for the Model 3 sedan.
As part of an ongoing Department of Justice investigation that kicked off after Musk’s fateful August 7th “funding secured” tweet, the FBI wants to know if the automaker misled investors via production promises that didn’t pan out.
News of the expanded probe comes by way of a Wall Street Journal report, citing unnamed sources. Tesla initially said it planned to reach a 5,000-vehicles-per-week production target for its Model 3 sedan by the end of 2017. That didn’t happen, nor did the pushed-back target date of end-of-March, 2018. It was only in the week leading up to the end of June that the company pushed out enough vehicles to say it had reached its goal — though the average weekly rate, to this day, remains below that marker.
“We have not received a subpoena, a request for testimony, or any other formal process, and there have been no additional document requests about this from the Department of Justice for months,” a Tesla spokesperson told the publication.
However, the WSJ reported that several Tesla employees have received subpoenas, as well as requests for information. The automaker has already submitted info to the DOJ related to Musk’s public pronouncements regarding production figures.
After landing in hot water with the feds over Musk’s failed go-private gambit (and the hasty tweet that preceded it), Tesla and its CEO were forced to settle with the Securities and Exchange Commission after the regulator slapped the company with a fraud lawsuit. Tesla and Musk were ordered to pay $20 million each, with Musk booted from the chairman’s seat for a period of three years.
At the time, Musk blamed the slow ramp-up of Model 3 production on a variety of factors, mainly supply issues. However, in order to achieve one-off weekly rates of 5,000 vehicles, the company’s Fremont, California assembly plant had to construct a new production line inside an outdoor, tent-like structure. The tent’s existence was only revealed in June.
[Image: Elon Musk/ Twitter]
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Will the Feds investigate Buick for over promising sales of the Cascada? Isn't it better to have insatiable demand and meet it late, than no demand with unsold cars sitting around for two model years?
The investigation will not result in any criminal indictments. It will however supply enough ammunition so the board can fire Elon and sell/merge the company before it implodes.