Tesla says the SEC has investigated the company's claims about Model 3 production

  • Tesla said in a regulatory filing released on Friday that the Securities and Exchange Commission (SEC) has subpoenaed the automaker about comments it made in 2017 about the production of the Model 3 sedan.
  • “The SEC has issued subpoenas to Tesla in connection with (a) Mr. Musk’s prior statement that he was considering taking Tesla private and (b) certain projections that we made for Model 3 production rates during 2017 and other public statements relating to Model 3 production,” Tesla said in the filing.
  • “Aside from the settlement with the SEC relating to Mr. Musk’s statement that he was considering taking Tesla private, there have not been any developments in these matters that we deem to be material, and to our knowledge no government agency in any ongoing investigation has concluded that any wrongdoing occurred,” the automaker added.

Tesla said in a regulatory filing released on Friday that the Securities and Exchange Commission (SEC) has subpoenaed the automaker about comments it made in 2017 about the production of the Model 3 sedan.

“The SEC has issued subpoenas to Tesla in connection with (a) Mr. Musk’s prior statement that he was considering taking Tesla private and (b) certain projections that we made for Model 3 production rates during 2017 and other public statements relating to Model 3 production,” Tesla said in the filing.

“Aside from the settlement with the SEC relating to Mr. Musk’s statement that he was considering taking Tesla private, there have not been any developments in these matters that we deem to be material, and to our knowledge no government agency in any ongoing investigation has concluded that any wrongdoing occurred,” the automaker added.

The Wall Street Journal reported in August that the SEC was investigating Tesla’s 2017 predictions about Model 3 production. The publication reported on October 26 that the Department of Justice (DOJ) was also investigating the matter.


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According to The Journal, the DOJ is trying to determine if the automaker made projections in 2017 about Model 3 production that it knew it would not be able to achieve. While Tesla CEOElon Musk said in July 2017 that it appeared Tesla could make 20,000 Model 3s per month starting in December 2017, Tesla made just 2,685 Model 3 vehicles in 2017.

According to The Journal, the DOJ’s investigation has “intensified” in recent weeks, as FBI agents have reportedly reached out to former Tesla employees, who previously received subpoenas, and asked them for testimony.

A Tesla representative told Business Insider last week that it has complied with a “voluntary request” for documents from the DOJ, but had not been subpoenaed by the government agency.

“When we started the Model 3 production ramp, we were transparent about how difficult it would be,” the representative added. “Ultimately, given difficulties that we did not foresee in this first-of-its-kind production ramp, it took us six months longer than we expected to meet our 5,000 unit per week guidance.”

The DOJ did not respond to Business Insider’s request for comment.

The Journal reported in October 2017 that when Model 3 production began in July 2017, the body shop at Tesla’s Fremont, California, factory wasn’t completely functional. It reportedly was not fully installed until September 2017.

Tesla hit a long-delayed goal of making 5,000 Model 3s in one week at the end of June 2018, and, in October, Tesla said it produced 53,239 Model 3s during the third quarter after projecting it would make between 50,000 and 55,000. The automaker made 5,300 Model 3s during the final week of the third quarter, less than the weekly goal of 6,000 it had set for the end of August.

Musk acknowledged in April that Tesla had attempted to automate too many production tasks at the Fremont factory and would use more human workers in the assembly process.

The DOJ was previously reported to be investigating comments Musk made on Twitter in August about potentially taking Tesla private. Those comments led to a lawsuit from the SEC that was settled in September. Under the terms of the settlement, Musk must step down as the chairman of Tesla’s board of directors for three years and pay a $US20 million fine.

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