Tesla shared documents with DOJ about Model 3 production

It's not all good news for Tesla this week.The electric carmaker said in a statement Friday that it c...

Posted: Oct 27, 2018 11:53 PM
Updated: Oct 27, 2018 11:53 PM

It's not all good news for Tesla this week.

The electric carmaker said in a statement Friday that it complied with a "voluntary request for documents" from the Department of Justice about Tesla's "public guidance" about Model 3 production.

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Tesla made the statement after a Wall Street Journal report said the FBI is looking into whether Tesla (TSLA) misled investors about production of its Model 3 sedan, which has suffered a string of delays and other issues as the startup sought to bring the car to market.

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.

Tesla previously confirmed the existence of a Department of Justice probe, but reports about the scope and topic of the investigation are new.

Tesla said in Friday's statement that investigators came to the company earlier this year and the company provided requested documents. "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 statement said.

The Journal reported that FBI agents have issued subpoenas to some former Tesla employees. And recently, agents have sought interviews with some of them.

The DOJ did not respond to CNN Business's request for comment.

The investigation is separate from an ordeal with the Securities and Exchange Commission. Tesla and CEO Elon Musk were saddled with a combined $40 million worth of fines to settle SEC's claims that Musk defrauded investors with tweets saying he planned to take the company private.

The development comes two days after the company posted a record quarterly profit and its third profit since going public in 2010. Investors cheered the report, and the company's stock shot up about 10% during after-hours trading Thursday evening.

Some analysts also said the positive earnings report indicated that Tesla was turning a corner since facing a spate of bottlenecks and hangups as it ramped up production of the Model 3.

Musk pledged in the summer of 2017 that the company would be churning out 5,000 cars per week by the end of last year. That didn't happen. Meanwhile, the company faced a grilling from investors and Tesla stock took wild swings amid a series of other scandals.

The company said in its statement Friday that it was "transparent about how difficult" Model 3 production would be, "openly explaining that we would only be able to go as fast as our least lucky or least successful supplier, and that we were entering 'production hell.'"

"While Tesla gets criticized when it is delayed in reaching a goal, it should not be forgotten that Tesla has achieved many goals that were doubted by most," the company said.

Tesla finally hit its Model 3 production target in June of this year, about six months late.

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Alabama Coronavirus Cases

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