Tesla says it hasn’t been subpoenaed on Model 3 production following report of FBI investigation

Posted on

UPDATED: 26-10-18 16:16 ET – adds details, closing stock

Tesla has not received a summons from the US Department of Justice regarding the prediction for Model 3 production, the car manufacturer said on Friday, after The Wall Street Journal reported that the company is dealing with a deeper criminal investigation into the projections.

The company received a voluntary request for documents from the DOJ and was cooperative in the response, said a spokesperson for Tesla.

"We have not received a summons, a request for a testimony or other formal process, and there have been no additional requests from the Ministry of Justice for months," said the spokesperson.

The FBI investigates whether Tesla misinterpreted information about the production of its Model 3 sedans and misled investors about its activities, which date back to early 2017, according to the Journal.

The news is that Tesla CEO Elon Musk is under pressure to deliver consistent production numbers for the Model 3, which are seen as crucial for its profitability and ability to be a large volume car manufacturer.

Musk and Tesla recently signed an agreement with the American Securities and Exchange Commission, which tried to test Musk's 7 August tweets about private Tesla. The SEC had called its allegations "false and misleading" and accused him of fraud last month. Both Tesla and Musk have to pay a fine of $ 20 million, and Musk has to give up his role as chairman for three years, as the company appoints an independent chairman.

On Wednesday, the company reported strong financial results for the third quarter, leading to Musk's promise to make the electric car manufacturer profitable, as the higher production volumes of its new Model 3 started to pay off. throw.

Model 3 challenges

Tesla and Musk are already faced with a proposed trial against group shareholders who claim that the company and its top executives made false statements about the readiness of Model 3 for volume production.

Model 3, which the company wants to boast of making a profit, was presented to the public at the beginning of 2016 with a big fanfare, with repeated promises in 2017 that Tesla was "on track" to build 5,000 Model 3's a week against the end of that year in his factory in Fremont, California.

Such statements were fraudulent according to the lawsuit, as the automated assembly lines to build the car in such a volume are behind schedule.

Tesla has denied the claims in the trial and claims that it has revealed production bottlenecks as soon as they were identified, and with reference to Musk's public statements that the company underwent a "production hell" period in 2017.

Tesla only achieved a goal to build 5,000 Model 3's per week in June, although current production does not meet that requirement.

The Tesla shares rose 5.1 percent to Friday at $ 330.90, which prolonged their rally after bullish results on Wednesday.