With Lawsuit in Rear View, Tesla Shifts Into Gear on Production

Photo Credit: Chris Carlson/AP/Shutterstock
October 1, 2018
Updated 2mo ago

By Conor White

Tesla investors are evidently relieved to have resolution on Elon Musk. On news of the CEO's deal with the Securities and Exchange Commission, shares were up more than 15 percent in early trading Monday.

News of a settlement may give shareholders hope that the company can now refocus on more important issues ー namely its production problems.

"Number one, is Model 3 production hell, which they're still not totally out of," Verge reporter Sean O'Kane said Monday in an interview on Cheddar.

The electric car maker might be getting close, though. According to a report from Electrek, Tesla ($TSLA) produced around 80,000 vehicles in Q3, including 53,000 Model 3s. That would be a 187 percent increase over Q2. The company could report official numbers as soon as Monday afternoon.

Of course, there are other issues hanging over the company, starting with who will succeed Musk as chairman. According to Saturday's settlement with the SEC, the billionaire founder will be able to remain on as CEO and as a company director, but will cede the chairman role for three years.

"Whoever comes in as chairman, it's going to be really interesting to see how much pressure they apply," O'Kane said.

The latest drama stems from the now-infamous Aug. 7 tweet that Musk had "funding secured" to take his company private. The SEC launched an investigation shortly after and charged the CEO last week with fraud, alleging he misled investors. Musk and Tesla will also both have to pay $20 million in fines, and Musk will be required to have his tweets reviewed by lawyers whenever he mentions the company.

John Reed Stark, president of John Reed Stark Consulting and a long-time SEC attorney, told Cheddar Monday that the agency is sending a clear message about Twitter to every public company.

"With this action, they've essentially told every executive out there, don't do it."

Stark, who spent 11 years as the chief of the SEC Office of Internet Enforcement, said the agency isn't trying to muzzle any executives, but rather wants to ensure the information they're conveying is wholly accurate.

"They just want when anybody at a company speaks to speak truthfully, and fully, and fulsomely, and in a robust manner," he said.

"And they want them to update and correct when they say something that's wrong."

For full interview click here.