October 28, 2020

The FBI investigates if Tesla cheated its investors with the Model 3, according to the WSJ

The FBI investigates if Tesla cheated its investors with the Model 3, according to the WSJ

The FBI is investigating whether the automaker Tesla cheated its investors with false expectations about the production of Model 3 and other parts of its business, according to The Wall Street Journal (WSJ).

According to the New York newspaper, in recent weeks FBI agents have contacted former employees of the company to interview them and ask for possible testimony in a criminal case.

The investigations are led by the federal prosecutor's office in San Francisco and have intensified after Tesla recently reached an agreement with the US Securities and Exchange Commission. (SEC, in its acronym in English) to avoid a fraud claim.

That pact included the departure of the company from its controversial founder Elon Musk, whose messages about a possible departure of Tesla from the stock market triggered the action of the regulator.

The SEC reported that a series of messages that Musk had posted on Twitter on August 7 about his intention to remove the company from the market was a fraudulent act that temporarily inflated the value of the shares.

In this new case, according to the Journal, the investigation of the US authorities focuses on information provided by Tesla on the production of the Model 3, the most affordable vehicle of the brand.

The company presented the Model 3 at the beginning of 2016 and in 2017 it announced an ambitious production plan with the aim of producing 5,000 vehicles per week for that year.

However, the company had significant difficulties in meeting these forecasts and repeatedly failed to meet the targets set, which earned Musk numerous criticisms.

According to the WSJ, the authorities are studying whether Tesla announced these production projections knowing that it was impossible to comply with them.

In response to the information, the company said today that it has only received a request for documents from the Department of Justice on Model 3 and that it has responded to it.

The company also defended that from the beginning it was "transparent" about the difficulties that the production of the car would entail and said that the objectives took longer to be fulfilled than expected due to unforeseen problems.

This week, Tesla, which has never closed a year with benefits, announced that it earned $ 311.5 million in the third quarter of the year, compared to the $ 619.3 million it lost in the same period of 2017.

Today, although they retreated momentarily after knowing the information of the WSJ, the shares of the company rebounded quickly and ended the session on Wall Street with a rise of more than 5%.


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