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Tesla Model 3

Tesla hasn't had an easy 2022, cheers to a combination of ramp-up difficulties surrounding the Model 3 and the erratic behavior of its CEO, Elon Musk. The latter, at least, appears to have straightened out some of his own problems later on repeatedly attacking a private citizen with claims he was a pedophile, beingness fined for making untrue statements regarding Tesla potentially going individual, bravado upward at investors on conference calls, and misrepresenting the circumstances of a fatal accident involving one of his company's vehicles. This week, Tesla reported a rare profitable third quarter and showed evidence that its Model three ramp, while not quite yet reliably at 5K cars per week, has improved dramatically from where the company was this fourth dimension last year.

Unfortunately, Elon Musk'due south legal problems may be well-nigh to get a whole lot worse. The Wall Street Journal reports that the DOJ is now looking into whether Tesla misled investors most its vehicle production ramp for the Model three back in 2022. As some of you may remember, the company's product schedule looked like this:

In this 2022 Tesla chart, the company said it would build 5,000 Model 3s by terminate of 2022.

The company's bodily production, as estimated by Bloomberg before this year, was more like this:

Paradigm past Bloomberg

Yous may notice that the two graphs are rather dissimilar. Instead of hitting ~2500 cars per week in November (that'south our eyeballed rate for that production point), the company hadn't even broken 1,000 vehicles per calendar month. The WSJ notes that Tesla had stated in September that information technology responded voluntarily to requests from the DOJ for documents, but did non disclose that the documents might be related to its Model 3 ramp as opposed to Elon Musk's statements on Twitter that eventually led to a ceremonious settlement with the SEC. Quondam Tesla employees have reportedly been contacted by the FBI.

I'yard going to exist honest and say that information technology'south not clear to me precisely where the legal line is betwixt a company simply existence wrong almost its ain ramp and a company that is found to have made materially fake statements almost its production timeline. Information technology'due south non unusual for companies to confront investor lawsuits if they brand promises about products that don't come up true, whether the statements refer to a predicted launch timeline or the overall performance of the hardware itself. Intel was sued earlier this year for non disclosing Spectre and Meltdown sooner. AMD paid to terminate a lawsuit filed against information technology over the Llano launch. But in both cases, these were investor lawsuits, not criminal investigations, and the DOJ clearly believes there'south reason to suspect Tesla's plans for an ambitious 2022 ramp (it unveiled its own projected timeline in Feb 2022) crossed the line from "Elon setting ambitious goals" to "Tesla covering up testify that should have been disclosed." Musk, for example, tweeted the following on July 2, 2022:

Musk actually produced 2,700 Model 3 vehicles in that same time period. The purpose of the DOJ investigation appears to be to discover if the company knew that its ain projections were impossible. While Tesla fabricated a strong return to profitability in the most recent quarter, information technology hasn't unveiled the $35,000 Model three vehicle it promised, it's removed its "full cocky-driving" upgrade offer from its website, and the delays to Model 3 production mean that some customers who may have reserved the vehicle counting on a $7,500 tax credit to make information technology affordable will never encounter the benefit — the revenue enhancement credit has begun phasing out for Tesla buyers due to volume of vehicles sold.

The New York Times states that Tesla has released a statement on the WSJ story claiming that it has merely received a voluntary asking for documents. "We accept not received a subpoena, a asking for testimony, or whatsoever other formal process, and there accept been no additional document requests about this from the Section of Justice for months," the Tesla spokesperson said.

Now Read: Tesla Yanks 'Full Self-Driving Capability' Amid Possessor Confusion, Tesla Settles With SEC, Will Pay $20M Fine, Musk Out as Chairman, and SEC Charges Elon Musk With Fraud, Seeks to Force Him Out as CEO