The Securities and Exchange Commission has closed its investigation into whether Tesla misled investors with its Model 3 production goals dating back to 2017, according to a new regulatory filing. But another new investigation may be taking its place.
Tesla says in the filing that the SEC closed the probe on December 4th, 2019. The company also says that, on the same day, the SEC “issued a subpoena seeking information concerning certain financial data and contracts including Tesla’s regular financing arrangements.” The government’s financial regulator opened the probe into Model 3 production numbers sometime in the middle of 2018. The SEC declined to comment.
If another investigation has been opened, that would mean there are still at least three ongoing government probes into Tesla. The Department of Justice has been investigating whether there were any criminal violations related to Tesla’s Model 3 production ramp-up since 2018. As part of that probe, agents from the Federal Bureau of Investigation have sought testimony and documents from Tesla employees and subpoenaed the company for records. The DOJ also opened a criminal investigation into Tesla CEO Elon Musk’s short-lived attempt to take his company private.
In the new filing, Tesla said it has been asked to “voluntarily provide [the DOJ] with information about the above matters,” but that “there have not been any developments in these matters that we deem to be material” to investors. The company says it has cooperated with the investigations, but that “to our knowledge no government agency in any ongoing investigation has concluded that any wrongdoing occurred.”
The two DOJ investigations and the one the SEC closed in December all stem from what was an incredibly hectic two years for Tesla in 2017 and 2018.
The company struggled mightily to get the Model 3, its affordable mass-market electric car, into production in 2017. Even after that happened, Tesla struggled to ramp up production to the level it had promised to both investors and the public. In 2018, Musk admitted that Tesla tried to automate too much of the Model 3 production process, and the company had to readjust how the car was built in order to fill the massive backlog of orders it had collected for the car.
Musk made matters worse in August 2018 when he tweeted about wanting to take Tesla private, saying at the time that he had “funding secured.” He didn’t, and the SEC brought him to court over the matter. He and Tesla were ultimately fined $20 million each, and Musk was banned from serving as chairman of any publicly traded company for three years.
This chaotic stretch not only had an impact on the public perception of both Tesla and Musk, but it opened the door to the government agencies. The SEC and DOJ seized the opportunity to subpoena records, employees, and root around in Tesla’s inner workings. Tesla put itself on far more stable ground in 2019, expanded the Model 3 into new markets, and has new products on the way. In return, the company has been rewarded by the stock market. But it continues to do all that under the close eye of two government agencies.