Despite what some fan boys have told me about how ingenious Elon Musk is, Tesla is once again in the news for blowing smoke. Being that they make electric cars, that in itself is quite a feat.
Following the recent spanking by the Securities and Exchange Commission (SEC), the Federal Bureau of Investigation (FBI) is looking into Tesla for lying to investors.
Federal Bureau of Investigation agents are examining whether Tesla misstated information about production of its Model 3 sedans and misled investors about the company’s business going back to early 2017, people familiar with the matter say.
Action in the criminal investigation, headed by the U.S. attorney’s office in San Francisco, has intensified in recent weeks after the Securities and Exchange Commission settled separate civil charges with Tesla and Chief Executive Officer Elon Musk, the people said.
Tesla had disclosed on Sept. 18 that it had received a “voluntary request” for documents from the Justice Department, 10 days before the company and Mr. Musk struck a settlement with the SEC of civil charges on in a separate case involving controversial tweets from Mr. Musk. But it hasn’t been previously reported that the Justice Department is focusing on Tesla’s Model 3 production issues dating to early last year and that the criminal securities-fraud probe is intensifying.
In February 2017, after reporting fourth-quarter 2016 results, Tesla laid out an aggressive production plan to bring out the Model 3, with plans to ramp up to 5,000 vehicles a week in the fourth quarter. On a conference call that month with analysts, Mr. Musk said he was pushing suppliers to be ready for a weekly run rate of 1,000 vehicles in July to 2,000 in August and 4,000 in September.
A few months later in July, Mr. Musk sounded confident that Tesla would be producing 20,000 Model 3s a month in December 2017, in line with his previous pledge of having 5,000 vehicles a week by year’s end. “Looks like we can reach 20,000 Model 3 cars per month in Dec,” he tweeted on July 2, 2017, days before the first Model 3 rolled off the production line.
Tesla ended up producing 2,700 Model 3s for all of 2017, and 793 in the last week of 2017.
Now the FBI is comparing the company’s statements with its production capability during 2017. Authorities are homing in on whether the company made projections about its Model 3 production knowing it would be impossible to meet the goals, people close to the situation say.
Give Musk’s erratic behavior recently and his supposed genius I.Q. it makes me wonder if he wants to be kicked off the Tesla Board so when the proverbial wheels fall off the company he can avoid the blame. I don’t recall that being the captain’s strategy when the Titanic hit the iceberg but then again you can only go down with your ship once.