Tesla denies report that it was subpoenaed on Model 3 production
UPDATED: 10/26/18 4:16 pm ET - adds details, stock close
Tesla has not received a subpoena from the U.S. Department of Justice related to its forecast for Model 3 production, the carmaker said on Friday, after The Wall Street Journalreported the company is facing a deepening criminal probe about the projections.
The company received a voluntary request for documents from the DOJ and was cooperative in responding to it, a Tesla spokesperson said.
"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.
The FBI 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 Journal reported.
The news comes as Tesla CEO Elon Musk faces pressure to deliver consistent production numbers for the Model 3, seen as crucial to its profitability and ability to be a high-volume car manufacturer.
Musk and Tesla have recently settled with the U.S. Securities and Exchange Commission, which was probing Musks Aug. 7 tweets about taking Tesla private. The SEC had called his claims "false and misleading" and accused him of fraud last month. 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.
On Wednesday, the company reported strong third-quarter financial results, delivering on Musks promise to turn the electric-car maker profitable as higher production volumes of its new Model 3 began to pay off.
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 Model 3, which the 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, Calif.
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 Musks 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.
Shares of Tesla rose 5.1 percent to close Friday at $330.90, extending their rally following bullish results on Wednesday.