Tesla's Blowout Earnings, Deepening Criminal Probe, and Same Old Musk

Marcus Newton
October 31, 2018

According to The Wall Street Journal, the company is suspected of providing investors with inaccurate information about the schedule of production of the new model electric auto Model 3.

But it hasn't been previously reported that the Justice Department is focusing on Tesla's Model Three production issues dating to early previous year and that the criminal securities-fraud probe is intensifying.

Tesla has denied the claims in the lawsuit, saying it disclosed production bottlenecks once they were identified, and citing Musk's public statements that the company was undergoing a period of "production hell" in 2017.

Tesla's Model 3 could be launched in Europe at the beginning of next year, the company said, with deliveries expected to start in February and March.

Investors betting on Tesla's demise were dealt a $2bn blow last week as the shares surged by more than a quarter after it stunned analysts by posting its first quarterly profit in two years.

Agents are probing whether Tesla "misstated information about production" and misled investors starting in 2017 about its ability to meet manufacturing goals, the Journal report says.

More news: Khashoggi body not found yet: Turkish FM
More news: Hurricane Oscar gains strength but still no threat to land
More news: Futile To Talk of Paul Pogba Return, Juventus Vice-President Says

The Model 3 global expansion is pushed to early and mid-2019.

In 2016, the prototype of the most recent Tesla model, the Model 3, was revealed but not officially released to the public before undergoing a few additional modifications.

Former employees received subpoenas, and Federal Bureau of Investigation agents are seeking to interview them, the source said. We are enormously proud of the efforts of the whole company in making it through this hard ramp and getting us to volume production.

Shares of Tesla rose 4.5 to $329, extending their rally following bullish results on Wednesday.

In early 2017, the California-based company announced plans to produce up to 5,000 Model 3s a week by the end of that year. As part of the settlement, Tesla had to pay a $20 million fine to the SEC and agreed to put in place new guidelines to oversee Musk's social media use. The company this week reported third-quarter earnings of of $417 million on revenue of $6.8 billion. The company generated positive cash flow of $1.4 billion in the third quarter, compared to a negative $301 million at the same time a year ago.

Other reports by MaliBehiribAe

Discuss This Article

FOLLOW OUR NEWSPAPER