Is Elon Musk trying to provoke the SEC with weekend’s Tesla tweet?
A similar tweet sent almost two months ago in which Musk said Tesla would build 500,000 cars in 2019 led the SEC saying he was in contempt of a settlement reached with the regulator
New York — Elon Musk, already in hot water over his Twitter use, posted another Tesla production forecast reminiscent of the one that landed him before a federal judge earlier in April.
Musk wrote Sunday that Tesla will make more than 500,000 cars in the next 12 months. A similar tweet sent almost two months ago in which Musk said the company would build 500,000 vehicles in 2019 led the US Securities and Exchange Commission (SEC) to argue he was in contempt of a settlement reached with the regulator in 2019.
The latest forecast, given as a seemingly innocuous aside in a discussion about the future value of Tesla vehicles, nonetheless came as Musk’s lawyers are negotiating with the SEC over an agreement that put controls on the billionaire’s tweeting. A US judge gave the two sides until April 18 to meet for at least an hour and resolve their differences. If they can’t, she’ll rule whether Musk is in contempt.
The legal tussle for Musk served as a distraction amid a record decline in deliveries for Tesla during the first quarter. Concerns about demand for Tesla’s vehicles escalated last week after the Nikkei reported the company and its partner Panasonic were freezing plans to expand capacity at the battery factory they share in Nevada.
Musk on Saturday disputed reports that Panasonic had boosted annualised battery cell production capacity at the plant to 35 gigawatt hours, saying the company’s lines were only at 24 gigawatt hours and have been constraining output of Tesla’s Model 3 sedan.
Tesla shares fell as much as 1.7% to $263.03 as of 9.38am on Monday in New York trading. The stock is down 21% in 2019.
Both the Panasonic and the next-12-months production tweets are noteworthy in the light of the settlement that sprang from Musk tweeting in August about trying to take Tesla private. The SEC accused the CEO of securities fraud, and Musk settled. He agreed to pay $20m, step down as chair and seek pre-approval from an in-house securities lawyer before tweeting information material to the electric-car maker.
Musk’s legal team has argued that he retained discretion to determine whether he was sending out material information or not, and that his February 19 post about Tesla’s 2019 production was consistent with comments he made weeks earlier on an earnings call.
In an April 4 hearing where Musk appeared, US district judge Alison Nathan questioned the specifics of the CEO’s settlement with the SEC and told the two sides to rework the language of their agreement.
“Take a deep breath, put your reasonableness pants on and work this out,” Nathan said. She wrote in an order the next day that if Musk is held in contempt, the court will allow further briefings on sanctions. The SEC said at the hearing that the remedies it was seeking included a series of escalating fines for future violations, and monthly reporting on Musk’s communications.
With Kevin Miller