Moneybox

Tesla Has A Serious Legal Problem That Isn’t Its Very Online CEO

SpaceX CEO Elon Musk speaks at a press conference at SpaceX headquarters on September 17, 2018.
SpaceX CEO Elon Musk speaks at a press conference at SpaceX headquarters on September 17, 2018.
Mario Tama/Getty Images

Just because Tesla was able to settle with the Securities and Exchange Commission over Elon Musk’s not-actually-at-all-funded buyout of the company doesn’t mean they are done with legal problems.

The Wall Street Journal reported Friday that the FBI is looking into whether the electric car company “misstated information about production of its Model 3 sedans and misled investors about the company’s business going back to early 2017.”

While Tesla has recently ramped up its production of its more reasonably priced sedan, Musk’s promises about how many Model 3s the company can produce have always drawn intense focus from analysts, investors, and the legions of amateur Tesla-watchers.

Tesla was more or less building up its production capacity from scratch and on the fly, and many were doubtful they could actually meet their optimistic targets for how many cars they would make. And now the FBI, the Journal reported, “is comparing the company’s statements with its production capability during 2017,” and specifically if “the company made projections about its Model 3 production knowing it would be impossible to meet the goals, people close to the situation say.”

For example, the Journal reported, in early 2017, Tesla said it had a plan to start producing 5,000 cars a week by the the fourth quarter of that year (and yes, there was an Elon Musk tweet.) The company ended up making 2,700 for the whole year.

Of course merely being overoptimistic in your forecasts isn’t a crime, but giving out numbers that investors rely on that you know you can’t hit may very well be.