Tesla misses weekly Model 3 production target, flags tariff costs

Tesla misses weekly Model 3 production target, flags tariff costs

Troy Powers
October 3, 2018

Just last week, Musk cleared a dark cloud hanging over the company when he agreed to settle a Securities and Exchange Commission case alleging he had misled investors by declaring he had lined up the financing to take Tesla private.

Under a settlement announced Saturday, Musk will give up his post as Tesla's chairman for at least three years.

A take-private price of $420 a share would value Tesla at $82 billion and marks a significant jump from the stock's current levels of roughly $379 a share. According to Musk, it'll do about 95kph in less than two seconds and can reach a top speed of over 400kph.

Tesla CEO Elon Musk urged employees to "go all out" in the final day of the third quarter, as the electric-car maker pushed to meet ambitious production goals for the Model 3.

Alongside Musk's change of interaction with Tesla, both he and the company need to pay a $20 million fine for the foible.

Tesla has also agreed to appoint two new independent directors to its board, establish a new committee of independent directors and put in place additional controls over Musk's communications.

Tesla is 'very close' to profitability, Musk says in staff email
In addition to appointing an independent chairman, Musk will be ineligible to be re-elected as chairman for three years. Tesla shares took a steep dive last Friday, plunging 13.90% amidst news of the SEC's lawsuit against the outspoken CEO.

The SEC sued Musk last week for securities fraud, saying the executive hadn't lined up funding for the deal, as he had claimed.

Tesla Inc (TSLA.O) announced record quarterly vehicle production numbers on Tuesday but warned of major problems with selling cars in China due to new tariffs that would force it to accelerate investment in its factory in Shanghai.

Elon Musk was forced to step down as the chairman of Tesla over the weekend following a string of controversial tweets.

The settlement marked a swift end to the SEC's lawsuit, which was filed Thursday.

Investors anxious that heralded a long-drawn out fight with the regulator that would see Tesla lose its talismanic leader, undermine its ability to raise capital and cripple operations as it ramps up production of its crucial Model 3 sedan. Likewise, Tesla will pay another $20 million due to its failure to check whether Musk's announcements complied with the law.

Tesla's most active high-yield bond issue traded up 2.5 cents to 86.75 cents on the US dollar early Monday, the biggest gain since August 2. Since starting the production of the electric sedan past year, the Model 3 ramp has been beset by multiple challenges, including bottlenecks in both the Fremont factory and Gigafactory 1.