Tesla says has not received subpoena on Model 3
production
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[October 27, 2018]
By Alexandria Sage and Arjun Panchadar
SAN FRANCISCO (Reuters) - Tesla Inc <TSLA.O>
has not received a U.S. subpoena related to its Model 3 production
forecasts, the electric carmaker said on Friday, following a report that
it faced a deepening criminal probe about the projections.
The company has cooperated in responding to what it called a "voluntary
request" for documents from the Department of Justice in September, a
Tesla spokesperson said. The agency has the ability to press criminal
charges.
"We have not received a subpoena, a request for testimony, or any other
formal process, and there have been no additional document requests
about this from the Department of Justice for months," the spokesperson
said in an email.
The Federal Bureau of Investigation is examining whether Tesla misstated
information about the production of its Model 3 sedans and misled
investors about its business going back to early 2017, the Wall Street
Journal reported, citing sources.
In recent weeks, FBI agents have contacted former Tesla employees to
seek testimony in the criminal case, according to the report. The
ex-employees received subpoenas earlier in the probe, and FBI agents
recently have sought to interview a number of them, the sources said.
![](http://archives.lincolndailynews.com/2018/Oct/27/images/ads/current/burtonview_coop_sda_daily_FFARM_2016.png)
Any focus on Tesla's past statements about Model 3 production targets
would broaden the probe by the agency, which Tesla said last month was
looking at statements made by Chief Executive Elon Musk about a
go-private deal that was later called off.
Tesla first disclosed in September that the DoJ was investigating Musk's
tweets about having "funding secured" for a deal to take Tesla private,
saying the agency had asked for documents about such statements.
Any expansion of the FBI's probe comes as Musk faces pressure to deliver
consistent production of the Model 3 at a profit. The company on
Wednesday posted a profit and positive cash flow, making good on pledges
made by Musk earlier this year, as the company ramps up volume of its
new sedan.
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![](../images/102718pics/busine31.jpg)
A row of new Tesla Model 3 electric vehicles is seen at a parking
lot in Richmond, California, U.S. June 22, 2018. REUTERS/Stephen Lam
![](http://archives.lincolndailynews.com/2018/Oct/27/images/ads/current/atlantabank_lda_FFARM_2018.png)
MODEL 3 CHALLENGES
Tesla and Musk already face a proposed class action shareholder lawsuit claiming
that the company and its top executives made false statements about the
readiness of the Model 3 for volume production.
The car, which the money-losing company is banking on to turn a profit, was
introduced to the public in early 2016 to great fanfare, with repeated promises
throughout 2017 that Tesla was "on track" to build 5,000 Model 3s per week by
the end of that year at its factory in Fremont, California.
Such statements were fraudulent, according to the lawsuit, given that the
automated assembly lines to build the car in such volume were behind schedule.
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 only reached a goal to build 5,000 Model 3s per week in June, although
current production has fallen short of that.
Musk and Tesla only recently settled with the U.S. Securities and Exchange
Commission over Musk's Aug. 7 tweets. The SEC sued him for fraud, calling his
claims "false and misleading," before reaching a settlement.
Both Tesla and Musk must pay a $20 million fine, and Musk must give up his
chairman role for three years as the company appoints an independent chair.
Shares of Tesla rose 4.5 to $329, extending their rally following bullish
results on Wednesday.
(Reporting by Arjun Panchadar in Bengaluru; Editing by Shounak Dasgupta, Sai
Sachin Ravikumar and Richard Chang)
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