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Tesla Says Justice Department, SEC Are Investigating Model 3 Production Targets (cnbc.com) 116

Posted by BeauHD from the truth-will-prevail dept.
Tesla said in a regulatory filing Friday that the SEC and Justice Department are investigating their Model 3 production projections to see if they misled investors. CNBC reports: The filing confirms much of an Oct. 26 article in The Wall Street Journal that said FBI agents were looking at whether Tesla misled investors about production of its Model 3 sedans. The FBI is the principal investigative arm of the Justice Department. The SEC, which just settled its securities fraud investigation against CEO Elon Musk and the company, has separately subpoenaed Tesla for Musk's statements about production rates regarding its popular Model 3 sedan, the company said. DOJ prosecutors have also asked for the same information, although it stopped short of issuing a formal subpoena, the company said in a filing with the SEC. In an interview with Recode's Kara Swisher, Elon Musk denied the validity of the WSJ article.

"The amount of untruthful stuff that is written is unbelievable. Take that Wall Street Journal front-page article about, like, 'The FBI is closing in.' That is utterly false. That's absurd," Musk told Swisher. "To print such a falsehood on the front page of a major newspaper is outrageous. Like, why are they even journalists? They're terrible. Terrible people."
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Tesla Says Justice Department, SEC Are Investigating Model 3 Production Targets More

Tesla Says Justice Department, SEC Are Investigating Model 3 Production Targets

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  • Rei? (Score:1)

    by Anonymous Coward

    Is this just more Trump hating on Musk because Trump is a short deller, anti-tech, pro-GW, felon, Orange, going to jail, and no EVs in federal prison?

    I miss anything?

    • When people point out he's lying, Trump says it's fake news, and the journalists are terrible people. He sure is good at drumming up publicity though, getting people talking. One way Trump does that is saying it's going to be huge. The biggest ever.

      When the major papers (and regulators) point out Musk was lying, he says it's fake news and the journalists are "terrible people, just terrible". Musk sure is good at drumming up publicity though, getting people talking. One way Musk does that is saying whatev

  • Journalists are getting themselves extinct (Score:5, Insightful)

    by DontBeAMoran ( 4843879 ) on Friday November 02, 2018 @09:12PM (#57584164)

    Bloomberg and their stupid "china spyware chips are everywhere" bullshit story, WSJ trying to make Tesla fail... it's like the media is being controlled by idiots who believe technology is evil.

    Next up, newspapers publishing that coal is clean, nuclear is a gift from satan himself and space travel is impossible because the earth is all that exists in the universe.

    • Re:Journalists are getting themselves extinct (Score:5, Interesting)

      by rtb61 ( 674572 ) on Friday November 02, 2018 @10:23PM (#57584290) Homepage

      What is interesting about the Tesla beat up, focus on the cars, ignore the solar panels, batteries and controllers, they do not exist, shh (where the majority of money will come from in Tesla future, not high end cars which was always a limited market but home power systems where it has a big yet to be exploited edge). It seems the real target is those home energy systems, getting them off the market before more damage is done to the fossil fuellers. Lobbyists are continuing to fund government corporate appointees controlling government agencies on behalf of hedge fund managers buried up to the eyeballs in fossil fuels.

      Home power system, distributed energy networks, where the power stations have already been built, your home and only need the generators, solar panels and batteries, system that generate a surplus and feed, medium and high density residential as well as commercial, you even maintain the system for them and they pay you for your excess electricity. Check the return on solar power, compared to what you nobodies can generate in bank interest on your capital. When you don't pay for electricity, you get to keep that income, you panels generate a far better return than bank interest payments and they self adjust to inflation and you pay ZERO TAX on the return, woo hoo. You can see why Tesla must die.

      • Re: (Score:2)

        by AmiMoJo ( 196126 )

        Speaking of solar, what happened to their solar roofing tiles? Several other companies are shipping in quantity now, but Tesla seems to have delayed their product for some reason.

        • The problem is, they designed different ones, and the ones people like most turn out to suck, and the ones that are good cost more than expected. The other ones are fine, but might leave pre-order snobs disappointed compared to waiting for the good ones. So the roll-out is going very slowly.

          They're only selling it to early adopters right now, they're not trying to actually sell it to the public yet. That comes later.

          Plus, car sales are so good, they don't have batteries for the powerwalls. So they can't act

          • Re:Journalists are getting themselves extinct (Score:5, Informative)

            by Rei ( 128717 ) on Saturday November 03, 2018 @06:19AM (#57585162) Homepage

            Yeah, they've been seriously cell deprived. It's not enough that between 18650s and 2170s the Tesla-Panasonic alliance is now making 60% of the world's total EV battery capacity - Tesla has also been having to buy cells from other manufacturers to keep their Powerwall and Powerpack production going. Tesla's been consuming cells like a beast, mainly for Model 3, and it's impacting their other product lines.

            Panasonic has been lagging, but they're trying to catch up. At the end of Q3, GF1 was producing 2170s at an annualized rate of around 20GWh/year (current global production for EVs is around 40GWh/year). Panasonic is installing three of its new, faster line design (joining the 10 lines of their older design); this is expected to bring them up to 35GWh/year by March.

            Gotta love those sorts of scaling factors. We live in interesting times.

            BTW, Panasonic has stated that they're not going to be building out lines in Shanghai next year, although might in the long-term. Their capital is currently focused on GF1. Model 3 production at GF3 will be started using a mix of cells, both imported from GF1 and from local Chinese manufacturers. From the 10-Q, it looks like they're planning to take the route I laid out on TMC a couple weeks ago:

              * Fremont's lines are all designed for 10k/wk production rates, but some - namely, paint and GA (general assembly), look likely to bottleneck out at 7k/wk. Upping these rates would require meaningful investment and/or downtime to boost to 10k - but Tesla doesn't really need 10k/year in the US. The body, stamping and plastics lines all look ready for 10k.
              * Tesla has already started site work at Shanghai. Their first step will be to have it leveled and prepped, with utility and transport connections in place. A factory is worthless if things and people can't move smoothly in and out.
              * GA lines are the fastest and easiest to build; Tesla made one in a month out of scrap in Q2 this year. I expect them to have the first GA line up in late Q2 of next year.
              * Paint lines are more complicated to get running smoothly and consistently. I expect them to open their first paint line in Q3/Q4 of next year.
              * At this stage, they'll import BIWs (Body In Whites), made using the extra 3k capacity in the body, stamping and plastics lines at Fremont, and finished packs and drive units from GF1. So Fremont will be at 7k and GF3 at 3k. BIWs will need either dry packaging or temporary anti-corrosion coatings for shipping, so Tesla will have to prep for this.
              * Stamping, plastics, body, pack, and cell production will come on line in early '20, along with new GA and paint lines to ramp local production (specifically, to add Model Y production into the mix). This also frees up 3k capacity at Fremont and GF1.
              * In the meantime, GF4 prep work, the first GA line, and the first paint shop will have been completed in Germany (early '20, 2-3 quarters behind Shanghai). So the extra BIWs, drive units and packs get shipped to GF4, and the Shanghai process repeats.
             

            • Re: (Score:2)

              by Rei ( 128717 )

              Ed: "the extra 3k capacity in the body, stamping and plastics lines at Fremont" -> "the extra 3k capacity in the body and stamping lines at Fremont".

          • So Musk is supposed to be this great businessman but he can't even read this market.

        • Re: (Score:2)

          by Rei ( 128717 )

          Tesla's messaging has been consistent: these are products that they need to offer a lifetime warranty on, with a 30 year warranty on electricity generation; they need to make damned sure they're going to last in the real world (and use the meantime to refine the installation mechanism to be as cheap as possible). So while Tesla has done a limited rollout to a small number of houses, they don't want to enter bulk production until they're ready.

          That said... IMHO, there's no question that the half year delay

          • Re: (Score:2)

            by AmiMoJo ( 196126 )

            I'm just wondering what the hold up is when other companies are delivering. Based on the number of competitors in the market it just can't be that difficult to enter, although some did announce a little earlier.

    • and space travel is impossible because the earth is all that exists in the universe.

      Well, actually. Earth is the only habitable zone that exists within a lifetime's travel distance. So 'space travel' is possible, if your idea of 'travel' is to get in the cramped Winnebago and stay inside it for the entire trip.

      • Re: (Score:2)

        by lgw ( 121541 )

        Well, actually. Earth is the only habitable zone that exists within a lifetime's travel distance.

        Cloud cities on Venus are possible with current tech levels. Much easier that Mars, as you have air pressure, oxygen, water, reasonable sunlight, and natural radiation shielding. You also have all the trace elements needed to keep soil good. While you couldn't do it with COTS gear, you don't need any amazing breakthroughs either.

        So 'space travel' is possible, if your idea of 'travel' is to get in the cramped Winnebago and stay inside it for the entire trip.

        Unless there's "new physics", we'll only be going to another star in a space ship that carries 100k-1M people. It's not clear that it will ever be possible to send humans light

      • Comment removed based on user account deletion

        • Re: (Score:2)

          by Jzanu ( 668651 )
          Not in your lifetime, nor your grandchildren's lifetimes for 10,000 complete generations. You have no idea how big space really is.

          • You have no idea how big space really is.

            Space is big. You just won't believe how vastly, hugely, mind- bogglingly big it is. I mean, you may think it's a long way down the road to the chemist's, but that's just peanuts to space.

    • Well, journalists dropped the "objective teller of truth" thing decades ago. Now they are partisans who actively take sides and attempt to influence events in their favor. It's sad, but what can we do about it? When you mention this to them, they get ferociously angry and insist that staying objective is the work of the white oppressors (like Musk).

      • Re: (Score:2, Troll)

        by Rei ( 128717 )

        In case you're curious, the full context of that quote:

        Kara: "You pick fights with the press over Twitter, and then you have all your fans, of which there are many. Are you aware of what they do once you start them off?"

        Elon: "Well, I have to say, my regard for the press has dropped quite dramatically."

        Kara: "Explain that, please."

        Elon: "The amount of untruthful stuff that is written is unbelievable. Take that Wall Street Journal front-page article about, like, “The FBI is closing in.” That is u

        • Wow. That guy is just completely ignoring his own role in creating the situation. Shocking. The rot is far, far worse than I ever expected. If the media stopped lying, nobody would have any ammunition to use against them. But they're so wed to their role as biased advocates that they can't see lying is wrong. This is so, so terrible for our Republic. How did it come to this?

    • Bloomberg ... media is being controlled by idiots who believe technology is evil.

      ...satan himself ...

      Could it be... SATAN?!

      That's not new, here is the media going all SATAN on somebody back in `88.

      https://www.youtube.com/watch?... [youtube.com]

    • we get virtually all our information tech from an extremely aggressive and authoritarian regime. That's not up for debate. It's just a fact. We probably should keep a close eye on that.
  • 2017 production estimates, they were wrong about the estimates and were going through hell.

    Were they merely overly optimistic then or were criminally misleading? Since almost all the production woes were quite public. Tesla has said many times it was betting the company. Its behavior in early 2018 can actually shows it was just overly optimistic.

    • Re: (Score:1)

      by Anonymous Coward
      It isn't just the estimates. It was his production numbers as well. being a little sketchy on estimates is fine, being sketchy even a fraction on real numbers is not. So while the article title says projections it is also his actual statements of production numbers.

      • being sketchy even a fraction on real numbers is not.

        Sure, but investigating "real numbers" takes about ten minutes.

  • AIUI it's about production figures not forecasts (Score:5, Interesting)

    by gman003 ( 1693318 ) on Friday November 02, 2018 @09:24PM (#57584188)

    As I understand it, the problem under investigation is not "Tesla forecast they'd make X many but only made Y". Failure to predict the future is not illegal, and even being overly optimistic in your shareholder forecasts isn't a crime. As long as they weren't egregiously bullshitting when they made that public, they'd be good.

    The area under investigation is the actual production numbers. Tesla shorts have latched onto a pretty bonkers theory that Tesla was somehow falsifying their production numbers - fake VINs, or delivering known-defective vehicles to count them as "delivered" even though they'd need to be replaced. Some of it is quibbling over the definition of "delivered" - is something sent to a dealer counted as a "delivery" or does that only count when someone buys it? - made worse by Tesla not using independent-ish dealerships, but rather their own stores.

    I personally don't think there's a case here. Musk makes schedules he can't keep, and promises features he can't deliver, but he really doesn't lie about accomplishments. Especially not ones that are so easily verified - the FBI will have a pretty easy time finding out if VINs are being misallocated, so the investigation should be pretty short.

    • There are two things driving this:

      1. Musk very publicly gave the SEC the middle finger. Bureaucrats in the US may not have all encompassing power but they do have the power to make your life difficult. If you screw with them they're going to screw right back. And frankly, I kind of don't blame them in this case, messing with people's portfolios to impress your girlfriend and give her a good laugh (the 420/privatization tweet) is not how you run a public business (see my note below).

      2. There are a lot of

      • He should have taken it private about 1-2 years ago. Now, Tesla has the cash flow that is needed. Combine that with MY and the semi coming in 2019, and cash flow along with profits, will likely go up 2-4x. I will say, I find it sad that so many Americans want him to fail for their own personal gain, while in Europe, china, Australia, India, etc they are begging Tesla to come there.

    • somehow falsifying their production numbers - fake VINs, or delivering known-defective vehicles to count them as "delivered" even though they'd need to be replaced.

      That reminds me of when Miniscribe shipped 26,000 bricks in disk drive boxes. Good times.

    • Re: (Score:2)

      by AmiMoJo ( 196126 )

      The issue is that Musk made statements about production issues at Tesla that may not have been true. Similar to the "funding secured" claim that got him fined $20M and put on a leash by the SEC.

      Public companies have to be very careful about statements they make regarding things like production because people then make investment decisions based on them, and they must be truthful. It looks like Musk was baited by short sellers into making statements that were, shall we say, "optimistic" at best.

    • Re: (Score:2)

      by Kjella ( 173770 )

      Well according to the quote from Tesla here [cnbc.com]:

      In particular, the SEC has issued subpoenas to Tesla in connection with (a) Mr. Musk's prior statement that he was considering taking Tesla private and (b) certain projections that we made for Model 3 production rates during 2017 and other public statements relating to Model 3 production.

      Good thing Musk never makes "aspirational" targets. Oh, wait...

      Failure to predict the future is not illegal (...) As long as they weren't egregiously bullshitting

      Predicting a future you aren't actually planning for can be illegal. Like if you're planning to open a new plant in six months you can't claim it's opening next quarter and then announce a three month delay later. If a machine is capacity limited to 3000 cars/week and you're not doing anything about it you can't project to make 5000/week. If you're not actually planning to pay shifts to work 24x7 you c

      • Re: (Score:2)

        by olau ( 314197 )

        Still seems rather unlikely but considering how poorly he seems to understand his obligations as a CEO of a public company, who knows. He doesn't seem to have any understanding of why we made rules about misleading public investors.

        If he's been lying all along, he deserves what he gets. But it doesn't actually seem so. We'll see.

        What's ironic about this is that Musk is considerably more open and informative than most other CEOs in a similar position, which is a great benefit to the small investor IMHO.

        Case in point, the whole going private thing started because he thought he ought to tell the small investors about it too, and not just have private conversations with a few big ones.

  • Market does not think it is anything big. (Score:5, Insightful)

    by 140Mandak262Jamuna ( 970587 ) on Friday November 02, 2018 @09:25PM (#57584190) Journal
    The Wall St report came last week and stopped a good momentum, but the stock recovered very soon. This disclosure came early today during trading hours, and the stock barely budged. Looks like whatever it is, it has been fully priced into the stock.

    • Re: (Score:1)

      by Anonymous Coward

      Are you insinuating that Slashdot news is not up to the minute???

      How dare you!

  • Take that Wall Street Journal front-page article about, like, 'The FBI is closing in.'

    Not to age myself, but was that written by, like, a 'valley girl?"

    • Re: (Score:1)

      by Anonymous Coward

      Tomorrow, the WSJ will report that Tesla is to be gagged with a spoon, according to anonymous sources within the company.

    • That sort of usage of 'like' goes back to the beatnik days of the early 60's. And maybe beyond, even older.

    • Dude, like, do you think it is only people in a small part of California who use that word?

      I assume you're one of those upside down people, or maybe even Eurotrash.

      If you were American you'd like, totally know that everybody on the west coast talks that way.

      You don't get to go all Valley Girl until they say "Gag me with a spoon" or something.

  • DJT (Score:2, Insightful)

    by Tulsa_Time ( 2430696 )

    To print such a falsehood on the front page of a major newspaper is outrageous. Like, why are they even journalists? They're terrible. Terrible people."

    Welcome to Trump's world.

    • Re: (Score:1)

      by Cederic ( 9623 )

      I was trying to work out if Elon is becoming Trump or just unduly influenced by him.

      • I was trying to work out if Elon is becoming Trump or just unduly influenced by him.

        No. It's the journalists. They are lying. if they were writing about you, you would know they are lying too.

  • "The amount of untruthful stuff that is written is unbelievable. Take that Wall Street Journal front-page article about, like, 'The FBI is closing in.' That is utterly false. That's absurd," Musk told Swisher. "To print such a falsehood on the front page of a major newspaper is outrageous. Like, why are they even journalists? They're terrible. Terrible people."

    So, Fake News?

  • The Wall St Journal report Elon is critical of, came right in the middle of a huge rally last week. Big positive earning surprise, and that Friday when options close and sort out, the report came stopped the rally. Then within an hour the market realized it is old news and it recovered.

    The second report about subpoena came yesterday during market hours. Again it seems to be recycling some 10-K filing done in September. This time market did not budge much.

    The S3 partners is reporting that the number of

  • We're entering an era where journalists not only lie through their teeth to smear political opponents, they also routinely engage in blackmail to knock people off the internet and even take tens off thousands of dollars away from charities just because they don't like people.

  • Fake news alert. The filing can be found http://ir.tesla.com/static-fil... [tesla.com]

    It states: "Aside from the settlement with the SEC relating to Mr. Musk’s statement that he was considering taking Tesla private, there have not been any developments in these matters that we deem to be material, and to our knowledge no government agency in any ongoing investigation has concluded that any wrongdoing occurred."

    Let's focus on the fact that the Tesla Model 3 best selling car by revenue in the US!

  • There is little doubt that Elon Musk is a maniac. But he is a driven maniac, and his auto company probably would not exist if not for his monomaniacal drive and promotion of it. There has been an entirely disproportionate amount of activity in the media over some questionable actions that may have affected the stock price at a relatively small company -- Tesla. I have no doubt that this is being driven at least partly by labor union interests, who have been desperately trying to unionize the Tesla factor

  • 'Funding secured.' That is utterly false. That's absurd," SEC told Musk. "To state such a falsehood on a public platform is outrageous. Like, why is he even a CEO? He's terrible. Terrible person."

  • Like, why are they even journalists? They're terrible. Terrible people.

    Careful there, Elon. You're starting to sound like Trump.

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