When Elon Musk announced Tesla’s Model 3 sedan, it was sort of obvious that he was getting way out ahead of his wheels on the pricing and delivery goals of the company’s first mainstream car. At least it was to me.
Sure enough, instead of a sub-$30K car (after rebates) in 2017, those who put down $1,000 on a Model 3 in 2016 and have since taken delivery have coughed up nearly twice that much, and a year later than expected.
Now the FBI is conducting a criminal investigation into whether Tesla misled investors or not.
According to the Wall Street Journal, which broke the story, Musk told investors that Tesla would produce between 5,000 and 20,000 Model 3 sedans per month by the end of 2017. Meanwhile, Tesla ended up making just 2,700 Model 3s for the entire year.
Why is that important? Tesla raises capital to fund growth two ways. The first is equity funding, which is based on market value or share price. The second is those $1,000 deposits, which really add up. So there’s a big financial upside to pumping up the share price.
Did Musk knowingly misstate Tesla’s production figures or was he just guilty of being overly optimistic, an admission he’s made in the past? That is the question, as the saying goes, since intent does matter in a criminal case. Guess we’ll know soon enough.
Just want to that the Shortseller Enrichment Commission is doing incredible work. And the name change is so on point!
— Elon Musk (@elonmusk) October 4, 2018
In any case, Musk’s snarky tweets aimed at the SEC since settling civil fraud charges over his notorious “secured funding to take Tesla private at $420” tweet may have been a bit premature. Personally I think he poked a really big bear he should not have poked. Something tells me the billionaire entrepreneur won’t do easy time.
I’d advise Musk to lay low and watch his back — the feds are closing in — but you and I both know he won’t. That’s just not how he rolls.
Image credit Tesla Owner’s Club Belgium via Flickr (the bars are mine)