Tesla facing criminal investigation over Model 3 production, report says

Oct 28, 2018, 03:34
Tesla facing criminal investigation over Model 3 production, report says

Barely a day after announcing a record quarterly profit that buoyed its shares, Tesla is said to be facing a criminal investigation by agents of the Federal Bureau of Investigation, according to The Wall Street Journal.

Following the positive financial results Tesla share prices increased 9.1 percent to $314.86 (£245.58) a share yesterday after previously falling by 2 percent on Wednesday.

Auto Data site Edmunds noted Tesla is by far the biggest electric vehicle maker in the USA market, accounting for 76% of pure EV sales in the first three quarters of 2018.

Of course, skeptics say this is only a temporary surge in Tesla's books, something it won't be able to repeat, at least not anytime soon.

But these future product launches won't be bet-the-company the way the Roadster, the Model S and the Model 3 were. It's a combination of those models, Musk said, adding, "The advantage that Tesla will have is that we will have millions of cars in the field with full-autonomy capability, and no one else will have that.

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We note the competitive market will be steeper when Tesla launches in Europe given the bevy of new introductions from European OEMs". That didn't happen. Meanwhile, the company faced a grilling from investors and Tesla stock took wild swings amid a series of other scandals.

Q3 of 2018 is only the third quarter that Tesla has been profitable in its entire 15 years in business.

Musk seemed to express frustration about The Journal's story via Twitter Friday afternoon, replying to a Twitter user who suggested the story was motivated by a desire to lower Tesla's stock price.

Musk pledged in the summer of 2017 that the company would be churning out 5,000 cars per week by the end of previous year.

Tesla only reached a goal to build 5,000 Model 3s per week in June, although current production has fallen short of that.

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Free cash flow is a measure of how Tesla's "cash in the bank" is changing quarter by quarter. The starting price for the Model 3 was United States dollars 49,000 in the quarter, but the Company is working to bring the price to USD 35,000. The American auto company has already recorded outstanding success with the Model 3 despite dealing with initial production struggles, and Model Y is expected to follow the same path. Analysts argue that Tesla has learned quite a lot from the success and challenges of the Model 3.

In addition, building the duo in China will allow Tesla to avoid tariffs on Model 3 and Model Y vehicles it sells in China, which it would otherwise have to face if it imported them from another country.

Tesla shares boosted 12 percent after the exciting earnings report.

Tesla executives expect to begin delivering Model 3 cars in Europe in the first quarter of next year, and in China by the second quarter.

"We will also have a factory in Europe long term, because it is pretty silly to make cars in California and ship them to Europe", Musk said.

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