Tesla under investigation for Model 3 production claims

Tesla under investigation for Model 3 production claims

Regulatory filing confirms reports of Securities and Exchange Commission, Department of Justice probes on electric vehicle manufacturing information.

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Cars/Light trucks Electric vehicles Manufacturing Regulations

Palo Alto, California – Tesla Inc. officials acknowledged in a regulatory filing Friday that the U.S. Securities and Exchange Commission (SEC) is investigating statements about Model 3 electric car production made by CEO Elon Musk.

The electric car company announce preliminary earnings earlier in the week, posting its first quarterly profit, thanks to large numbers of Model 3 deliveries. In its filing, the company says it is averaging 4,300 Model 3 vehicles built per week, an annual pace of nearly 225,000 vehicles. When it announced the vehicle in 2016, the company announced a goal to reach a 250,000-vehicles-per-year capacity level by the end of 2017 with a 500,000-vehicle capacity by the end of 2018.

It has since backed away from those higher production volume targets.

Companies must list ongoing litigation in company filings to prepare investors for the possibilities of criminal charges or large payouts. In its most-recent SEC filing, Tesla officials confirmed media reports that federal regulators were investigating production claims.

“The SEC has issued subpoenas to Tesla in connection with… certain projections that we made for Model 3 production rates during 2017 and other public statements relating to Model 3 production. The (U.S. Department of Justice) DOJ has also asked us to voluntarily provide it with information about each of these matters and is investigating.”

In its filing, the company says it does not consider the investigation “material,” meaning it is unlikely to impact shareholder value.

“As is our normal practice, we have been cooperating and will continue to cooperate with government authorities. We cannot predict the outcome or impact of any ongoing matters,” The company said.