SAN FRANCISCO (Reuters) – Tesla Inc. announced Friday it has received a subpoena from the US Securities and Exchange Commission on its forecast for the production of Model 3 in 2017, a set of goals that the company's electric vehicles did not reach on time.
PHOTO FILE: A model 3 2018 Tesla electric vehicle is featured in this photo taken in Cardiff, California, United States, June 1, 2018. REUTERS / Mike Blake
The SEC has issued subpoenas for "some of the projections we've made for Model 3 production rates in 2017 and other public statements related to Model 3 production," Tesla said in a report on Friday. quarterly. A subpoena may require a company to deliver the documents that the applicant organization wishes to review.
The SEC had also issued subpoenas following earlier statements by CEO Elon Musk that he was considering keeping the company confidential, he said.
The SEC and the US Department of Justice are investigating whether Tesla has misled investors about its activities.
"To our knowledge, no government agency in an ongoing investigation has concluded to the existence of wrongdoing," Tesla wrote in his paper.
The SEC declined to comment.
The company also said Friday that 44% of its third-quarter net income came from undisclosed regulatory credits.
Investors have been trying to determine whether the worst has gone for the Silicon Valley company given the fallout from Musk's short-lived plan in August to privatize it and whether Tesla has finally stabilized its Model 3 rock production and could build the car. at profit.
Following the launch of Model 3 last year, Tesla has repeatedly missed ambitious production targets for the new vehicle, accusing "bottlenecks in manufacturing".
Jay Dublow, a partner with Pepper Hamilton LLP and former head of the SEC's enforcement branch, said the agency was probably looking to determine whether Tesla's projections were "factual or non-factual".
"It is possible that the SEC will take other measures to enforce the law if it turns out that the projections were made deliberately or recklessly, without foundation," Dublow said.
Tesla is already facing a class action lawsuit alleging that the company and its executives have misrepresented the availability of model 3 for mass production. The lawsuit quotes repeated promises in 2017 that Tesla was "on track" to build 5,000 3 models a week by the end of this year at its Fremont, Calif. Plant.
Tesla finally achieved this goal in June of this year.
Tesla denied the allegations, claiming to have revealed the production bottlenecks identified once, and citing Musk 's public statements that the company was going through a "hellish period of production" in 2017.
A spokesman for Tesla told Reuters last week that the company had received a voluntary request from the Justice Department for documents related to the Model 3 production forecast, but had not received any approval. subpoena.
ZERO EMISSION CREDITS
Tesla went through difficult months after Musk's tweets, which secured him "financing" for an agreement, which was scuttled for Tesla to be deprived. Musk and Tesla reached an agreement with the SEC in September after the agency filed a lawsuit for fraud.
The settlement required that Tesla and Musk pay a fine of $ 20 million each and that Musk relinquish his role as president for three years.
Last week, investors were encouraged by the company's third quarter net profit, widening margins and positive cash flow, which pushed stocks up.
The company then announced that it had sold "zero emission vehicles" on credit for $ 52 million. At the time, he was not saying that he had earned an additional $ 137 million in regulatory credits, which contributed to nearly half of the profits.
In its quarterly report, Tesla also announced plans to start building about 3,000 model 3 vehicles a week in Shanghai during the initial phase of Gigafactory 3, to reduce the impact of tariffs.
Sales of S-models and X-models in China will likely continue to suffer from the recent rise in Chinese government tariffs on US-made vehicles, he added.
Tesla shares closed up less than half a percent to $ 346.41 on Friday.
Reportage by Alexandria Sage, additional report by Vibhuti Sharma and Akanksha Rana in Bengaluru; Edited by Saumyadeb Chakrabarty and Rosalba O & # 39; Brien