Tesla Says SEC Issued Subpoena To Automaker Over Model 3 Production

Tesla Model 3 frame

NOV 2 2018 BY ERIC LOVEDAY 40

And, of course, that “considering taking Tesla private” statement made by Elon Musk will be evaluated too.

Tesla has formally admitted to being issued a subpoena by the Securities and Exchange Commission (SEC). Apparently, the SEC will evaluate two potential issues:

  1. Musk’s statement of “considering taking Tesla private.”
  2. Projections for Model 3 production made in 2017 and other public statements connected to Model 3 production.

The Department of Justice has voluntarily asked Tesla to provide info related to these matters too, though no subpoena has been issued by the DOJ as of today.

Here’s the statement issued by Tesla:

We receive requests for information from regulators and governmental authorities, such as the National Highway Traffic Safety Administration, the National Transportation Safety Board, the SEC, the Department of Justice (“DOJ”) and various state agencies. We routinely cooperate with such regulatory and governmental requests.

In particular, 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. The DOJ has also asked us to voluntarily provide it with information about each of these matters and is investigating.

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. 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. Should the government decide to pursue an enforcement action, there exists the possibility of a material adverse impact on our business, results of operation, prospects, cash flows, and financial position.

Categories: Tesla

Tags: , , , ,

Leave a Reply

40 Comments on "Tesla Says SEC Issued Subpoena To Automaker Over Model 3 Production"

newest oldest most voted
bro1999

Ok, all you fanbois *coughNixcough* can apologize for doubting the reports that the SEC subpoenaed Tesla now.

Pushmi-Pullyu

Tell you what: You list, and apologize for, just 1 out of 25 of all the false statements you’ve made over the years about Tesla and it’s cars; then we Tesla fanbois will list and apologize for 100% of the false statements we’ve made about GM and its cars… which will be a very short list. Contrariwise, I wonder just how many separate posts you’d have to use to do that? The forum software here does put a character/word limit to what you can put in just one comment…

Get Real

LMAO at yet another of GM Stealership employee MadBro’s desperate attempts to throw shade on Tesla and Nix for that matter.

Another example of a pathetic person eager sell out the future prospects of his own country’s greater good to lamely try and protect his own narrow self-interest.

Chris O

Interesting piece about trolls on Clean Technica today. This part caught my eye:

“But what are the actual aims of all these trolls and the people funding them?

There may be specific messaging aims — lies about the environmental impact of cleantech, misleading narratives on subsidies, etc. However, there are also generic aims. If they make discussions about a topic argumentative, controversial, and downright nasty, they drive people away from that topic. If your cousin John or sister Suzie finds a nasty discussion under any article about Tesla or solar power, there’s a decent chance they’ll stay away from the topic in order to not get slammed or even just to not have their state of mind disturbed. After all, people want to enjoy their lives, right?”

Guess for most people life is just too short to spend on troll-negativity invested internet forums, question is will they yet read the articles about subjects tainted by troll negativity?

Pushmi-Pullyu

The average troll — the sort of person which the term “internet troll” was coined to describe — merely wants to get attention in the internet version of throwing a tantrum; to disrupt normal discussion and focus attention (even if it’s negative) on himself.

Professional trolls, of the sort employed by Russian troll farms, are quite different. The intent of those who hire them is to promote divisiveness, fear, and distrust of American institutions… including what is called the “mainstream news media”.

Just how much of the trolling activity here is motivated by the latter agenda; a deliberate attempt to create divisiveness, tribalism, chaos, and fear? I won’t claim to have an answer. I think it’s pretty clear that most trolling activity is driven by those with an anti-EV or anti-Tesla agenda, either motivated by greed (i.e., stock shorters trying to manipulate Tesla’s stock price) or by political motives; Big Oil shills and far right wingnuts who have an anti-Green agenda.

Sadly, some trolling appears to be driven by those who work for legacy auto makers/dealers (or their suppliers), who — rightfully — see the EV revolution as a threat to their livelihood.

ziv

I think most of the FUD’sters on here aren’t Russian or anti BEV, I think most of them are one brand of plug in proponents who tear down the competition to make their own favorite look better. John1701 and Bro are both pro plug in, they are just anti anything made by a company other than their favorite.
I used to be a GM guy, still love my Volt, but I have transmogrified into a Tesla fanboy by slow increments! 😉

Djoni

Bro is just losing his time on the internet and our’s.
Skip his comment, they ain’t worth the pixel.

Life is just better without and much more instructive.

Doggydogworld

GM and Toyota plug-in fans should cheer all the other brands on, just like Tesla fans do 🙂

Nix

I have nothing to “apologize” for.

The folks who need to apologize were the folks like you using rumors they could not substantiate, to make accusations they could not substantiate.

Wild, irresponsible accusations THAT DID NOT COME TRUE!!!! All the BS about Musk being arrested and going to jail for a dozen different nuttery conspiracy theories simply never came true.

What I did was hold the feet to the fire of people making wild accusations to stick to the KNOWN FACTS at the time instead of going wildly off the deep end. Now we actually know the facts, and we can rationally discuss actual known facts. What is wrong with that?

Marcus E

Shorts lobby or big oil/auto corruption of US public institution ?

Brett

The SEC investigates lots of companies, GM had to pay a $1M fine just last year in connection with a failure to report on the potential future liability of their ignition switch issue. The SEC had a 2.5 year investigation going on until this past August with Exxon Mobil regarding their failure to its valuation of its reserves.

The flight to a theory of ‘corruption’ is illogical and unfounded, and is exactly the type of language certain politicians have used to erode confidence in US legal entities during investigations into election interference.

The SEC will likely investigate, deem that the previous fine levied was sufficient and close the investigation without any further action because they will be unable to prove in a court of law the missing a projected production number is not a malicious or fraudulent business practice, any more than missing the release date of a video game is.

anti-lord kelvin

Hope you are right, but the Exxon Mobil investigation info made me think about how many investigations SEC and DOJ made to every fossil fuel companies about hiding the true health cost of these industries? How many tens of billions, each year, in health cares and working lost hours to treat ten of thousands people and to parents helping and accompanying their sick children, the pollution caused by these industry is hurting US economy, US citizens, only to maximize revenues at the sake of some greedy big stockholders? How many investigations? ZERO! The moral compass of these organizations is the same of Koch Brothers’s, so, maybe no corruption and conspiracy in SEC and DOJ, but surely a total lack of proportionality and humanity.

Pushmi-Pullyu

“…exactly the type of language certain politicians have used to erode confidence in US legal entities during investigations into election interference.”

Putin and his Russian troll farms love it when American politicians make attacks our own investigative and intelligence institutions; baseless and intentionally divisive attacks motivated by nothing but selfish, empty partisan politics.

That weakens our country; such politicians are being “useful idiots” for Putin and his propaganda machine. What Putin wants above all else is to weaken the U.S. and its alliances, and certain right-wing American politicians are doing that far better than Putin and his propaganda ever could.

Pushmi-Pullyu

I don’t see it that way. Even as a strong Tesla fan, it looks to me like the SEC is doing its job. Corporate officers of publicly traded companies are supposed to avoid making false “material statements”; statements which might affect a reasonable person’s assessment of the company’s performance.

I don’t really understand how the SEC judges such things. Based on what companies routinely get away with regarding lying to everyone, from customers to stockholders to even their own employees, it seems the bar is set pretty low.

But Elon Musk certainly did paint a much rosier picture of Tesla putting the Model 3 into production in mid-2017 than reality justified. The reality was that they were not even remotely ready to start actual mass production at that time. Many parts of the car, including the battery pack, had to be entirely hand assembled because Tesla hadn’t made any significant progress at automating that part of the assembly.

If it wasn’t a false material statement to say that Tesla was ready to start mass production in June 2017, then I don’t know what does constitute a false material statement by a corporate officer.

TeslaPlease

Tesla management has determined they can outsmart the regulators or simply dismiss them outright. As long as Tesla is a publicly traded company it is fair and reasonable to expect them to report material information in a manner consistent with industry standards.

Coming up with terms like factory-gated and having vehicle delivery expenses / employee labor allocated in non-standard ways is cause for concern.

Once again, these sort of behaviors should not be necessary for a company claiming profitability.

Get Real

Look, another one of serial anti-Tesla poster “Tesla Please” vulture-like posts against Tesla as a threat to his own personal financial positions.

Pushmi-Pullyu

“Tesla management has determined they can outsmart the regulators or simply dismiss them outright.”

If you literally can’t stop yourself from posting anti-Tesla FÜD, then stay out of the debate. We’re trying to have a meaningful discussion here.

Reminds me of the fable of the Frog and the Scorpion: “I can’t help it. It’s in my nature.”

Get Real

Really?
We are all very familiar here with Tesla’s extraordinary efforts to go from a small producer to a true mass-producer of compelling EVs as a new company.

The evidence is abundant that they were doing everything they could to meet near-impossible stretch goals and of course they made mistakes like trying to over-automate their production which led to a lag to meet their stretch goals.

Terawatt

I don’t think anybody has accused Tesla of not trying. The issue is that they publicly present targets that they know they cannot and will not achieve, and they’ve always been doing that.

I don’t know the law much, but I know my morals. Elon is a cynical liar. Just watch what he’s willing to do to generate enthusiasm for his space venture:
https://m.youtube.com/watch?v=E4FY894HyF8&time=38:34

Then watch a fellow physicist critique that idea:
https://m.youtube.com/watch?v=j4KR4-TN-Yo

I think it cannot get any more clear-cut than this. Either Elon is the most inept physicist ever, or he cynically decided to excite a lot of people by giving them a vision of something he absolutely doesn’t think possible. He’s not a moron, so I’m left with “cynical liar”.

I’m not even remotely suggesting that the above example is anything illegal. But it is dishonest, immoral, deceptive, and more damaging than many “materially false” statements that could be made. His entire worth is built on his ability to sell a vision of a better future, one that is exciting and full of adventure. But when he sells a vision he MUST know is an impossible fantasy he deserves our scorn, not our admiration.

Pushmi-Pullyu

Terrawatt, there are three types of people in this world:

1. Those who actually go out and get things done. Elon Musk is a prime example of that sort of person.

2. The sort who stands around and watches others get things done, or at best just follows along.

3. The sort who sits on his arse and complains about how things are getting done.

Perhaps if you yourself were not so often in category #3, you wouldn’t be praising some blowhard who says “It can’t be done because blah, blah, blah”. If Elon listened to bloviating do-nothings like that guy, then the world never would have seen this:

https://www.youtube.com/watch?v=pX60GB3nv1I

Now, if you’re actually interested in reading about what needs to be done to turn rocketship travel from a high-risk, expensive, rare activity into low-risk, much less expensive, everyday commercial flights — actually learn something instead of demonstrating your ignorance of the subject and accusing those who know far more than you of lying about it — then you can start your education here:

https://upload.wikimedia.org/wikipedia/commons/7/79/LEOonthecheap.pdf

Pushmi-Pullyu

@Get Real:

There is a big difference between trying as hard as they could, and claiming they were ready months before they actually were. Elon said, repeatedly and emphatically as the date approached, that they were going to be ready to start mass production of the Model 3 on July 1, 2017, and that they expected their suppliers to have them the parts by then.

The reality was that they weren’t even remotely ready on July 1, and it’s my impression that they weren’t ready until near the end of the year. Elon didn’t even start working on fixing the massive failure of the battery pack production line at Gigafactory 1 until after July 1.

Get Real, I appreciate your tireless efforts to fight against all the anti-Tesla FÜD posted to InsideEVs. But let us please not go so far in being apologists for Tesla that we try to cover up the facts.

Let us leave the tactics of trying to gloss over reality and cover up the truth to the anti-Tesla “Wolf! Wolf! Wolf!” pack, and the trolls. We should be better than that. We are better than that.

Peace, brother.

Doggydogworld

Beyond the unrealistic forecasts, Musk said the 30 cars delivered at the end of July, 2017 were “production cars”. It was probably true in Musk’s mind, he has his own unique definitions of many common words. But if they weren’t built on the production line, he made a material misstatement.

I said here at the time they were hand-built, and got roundly abused by the faithful. We’ll see what the SEC says.

Another Euro point of view

You are an honest fan.

Pushmi-Pullyu

I’d value that a lot more if it didn’t come from a serial Tesla basher.

Pushmi-Pullyu

Pushy said:

“…to say that Tesla was ready to start mass production in June 2017”

Correction: The actual date repeatedly specified by Tesla, when they planned (and later claimed as fact) to be ready for mass production, was July 1, 2017.

Vexar

Don’t forget to vote on Tuesday. This is more than an overreaction, this is a witch hunt aimed on destroying the one, shining star in the automotive future of our nation.

pjwood1

Goes beyond “automotive”. Proudly, not on the side of “dig sh!t up and burn it, because that’s all I know”.

William

“That’s all I know”, could also be rephrased to include the following:

“Thats all I CARE to know, because my exorbitant 0il extraction profits are, at the future expense of many climate bag holders, necessary for maintaining my resplendent lifestyle today!”

Joel

I think you underestimate the market momentum of electric vehicles at this time, and perhaps the power( not to mention complexity of motives) of the auto industry itself to dictate the market right now.

The ever-decreasing issues with electric transport have been charging and and energy density. The issue with IC is efficiency. There is a clear, near-term path forward for electric transportation to reduce/eliminate their issues over the next several years while REDUCING cost and complexity, on a line that projects out to the foreseeable future and both issues nearly resolved vis-a-vis internal combustion already. None of this can be said for the efficiency of IC engines.

What Tesla seems to have essentially done is act as forcing function to accelerate consolidation around ONE of several potential successors to the NON-renewably powered iC( versus drop-in replacement bio-oil and derivatives, fuel cell-electric, etc.), primarily through large-scale deployment of their rapid-charging network. The writing’s on the wall at home and abroad – I.E. China – and electric’s performance and steam-like torque and HP from straight off the line means that markets will force a transition, regardless of what the government proposes.

Joel

Jeeze – 2 thumbs down to naught up. Who knows why, but I challenge anybody to show that that electrics won’t perform as well or better than an IC, at a similiar price, with no compromises, by the middle of next decade, or that auto companies wouldn’t have more motive than not to ramp up their EV offerings over that same span, regardless of policy. :-/

Doggydogworld

EVs have a power train performance advantage that offsets their expensive “gas tank” in segments where performance is paramount – e.g. sports cars and premium sedans/CUVs. They can’t compete on price in the econo-car segment, though, and still won’t be able to in 2025.

Goaterguy

If they can investigate the life of a supreme court judge candidate in 20 minutes, what is taking them so long with Tesla?

Else

Looks like SEC is colluding with the FBI to bring down Elon Musk and Tesla to save the Saudi Arabia and the legacy automakers.

Pushmi-Pullyu

Putin and his troll farms thank you for your divisive attack on respected American investigative agencies.

G2

Boy am I glad the SEC is out there, protecting me as a Tesla investor, and not looking into big oil’s looming crash and their statements ignoring the $5T industry implosion….

Doggydogworld

They rarely investigate fantasies.

Terawatt
I don’t know the applicable law here, but as a layman I find it strange to say the least that the tweet about considering taking Tesla private should be the bigger issue of the two. It was terrible judgement, but it was at least partially true, probably (Elon probably really was considering it — but the “funding secured” bit, the bit Tesla not coincidentally left out of its press release, we now know was an outright lie). The systematic and massive deception Tesla has engaged in regarding production timelines ever since it revealed the Model S seems to me a FAR more consequential issue, and one that affects consumers and the competition as well as Wall Street. I hope Tesla succeeds, but it would be better still if they turned down the hype. Elon is the kind of guy who gauges his audience and tells it what it wants to hear, without regard to whether he himself believes what he’s saying. It is impossible to conclude otherwise if you’ve ever seen his BFR talks, in which he pretends to envision Earth-to-Earth flights by fossil-fuelled rocket as the future of transportation. This was no impulsive transgression either, but prepared with lots… Read more »
rey

The SEC is now in the business of Shorting Tesla

Nix

It looks like there is some new news and some old news in this press release. The part about going private has already been settled by the SEC and Tesla, so that is old news. It seems like the SEC already put their best case forward and settled it. The news about the SEC inquiring about 2017 production numbers is new news, but it is much less of a legal risk, and is a much weaker accusation for three reasons:

1) The Tesla SEC public filings SPECIFICALLY cover production risks (unlike the talk of going public) and everyone who invested was given fair warning that there were multiple risks in production. If you bought TSLA shares and weren’t aware there was a RISK that production numbers wouldn’t be hit on time, you shouldn’t be buying stocks of any company, ever.

2) Tesla actually hit sustained production in the numbers they were targeting, even though they were 2 quarters late.

3) A court has already dismissed this exact complaint, before there was even discovery. As the judge wrote, “Federal securities laws do not punish companies for failing to achieve their targets.”

http://www.theverge.com/2018/8/27/17788602/tesla-model-3-lawsuit-dismissed-decision-sec

GoodGuy

Say something negative about Ford/GM & they immediately use their connections to punish you.