Report: FBI conducting criminal investigation into Tesla

Tesla Inc. shares, which were enjoying a rally on Friday, gave up most of the gain immediately after the Journal posted the report. But they recovered and closed at $330.90, a gain of $16.04, or 5 per cent on the day.

The Model 3 is a key part of Tesla’s plan to expand from a niche player in the luxury segment to a car maker with broader appeal. In early 2017, the Palo Alto, California-based company announced plans to produce up to 5,000 Model 3s a week by the end of that year. It fell far short, making just 793 in the last week and 2,700 for all of 2017. It didn’t hit the 5,000-a-week target until June 2018.

The Journal reported that the FBI is investigating whether the company made production estimates that it knew would be impossible to meet. The company defended its forecasts.

Tesla officials “were transparent about how difficult it would be” to ramp up Model 3 production, said spokesman Kamran Mumtaz. “Ultimately, given difficulties that we did not foresee in this first-of-its-kind production ramp, it took us six months longer than we expected to meet our 5,000 unit per week guidance.”

Last month, Tesla settled a civil lawsuit by the Securities and Exchange Commission over tweets by founder Elon Musk that funding was in place to take the company private.

The Associated Press

by Canadian Press

Report: FBI conducting criminal investigation into Tesla

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