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The Securities and Exchange Commission has been investigating Tesla for misleading statements about its Model 3 for months, unnamed sources in the know told the Wall Street Journal, long before CEO Elon Musk attracted the watchdog’s attention with his tweet about taking Tesla private.
At the time, the SEC subpoenaed a parts supplier working with the electric car maker, one of the sources said. Another adds that now the SEC has also subpoenaed members of Tesla’s board of directors to try and find out if and how much they knew about Musk’s plans for the company.
The WSJ recalls that Elon Musk has made bold predictions for Model 3 production, but real production numbers fell short of these until this June, when Tesla finally ramped up the weekly production of the Model 3 to 5,000. Last year, the company only made 2,700 Model 3s, compared with 20,000 predicted by Musk last year. Still, the 20,000 figure was much lower than a previous estimate of 200,000 Model 3s to be made in 2017.
The delays in the ramp-up were attributed to a range of problems with production capacity and suppliers. As far as the SEC is concerned, the question is whether Musk and others from the company’s management misled shareholders about the cause of the delays or their extent.
Meanwhile, regulators are also looking into the “funding secured” affair after Musk tweeted that he is ready to take Tesla private at a price of US$420 a share and he has already found the money to do so. Later it emerged that the Tesla CEO has been in discussions about taking the company private with the Saudi sovereign investment fund. Besides the SEC probe, Musk is facing a reputation stain as a result of his readiness to use Saudi oil money to take Tesla private.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.