Interesting article regarding the delays, By TOM KRISHER AP Auto Writer.
Elon Musk Statement on Tesla Production raises questions
Tesla CEO Elon Musk is once again drawing scrutiny for questionable comments he made to Wall Street analysts, this time involving the status of his company’s vehicle production.
On a Jan. 27 conference call to discuss Tesla’s fourth-quarter earnings, Musk stated that the company was producing new versions of its oldest models, the S sedan and X large SUV. He added that a “Plaid” high-performance version of the electric S would be available in February.
Experts say the disparity between Musk’s statement to analysts and the figures that showed zero production risks drawing the attention of Musk’s longtime nemesis, the U.S. Securities and Exchange Commission.
“I think he might have himself into a bit of trouble with the SEC,” said Anthony Sabino, an attorney and law professor at St. John’s University. “These are fairly direct statements. They are fairly unequivocal.”
John C. Coffee Jr., a Columbia University professor who is a leading authority on securities law and corporate governance, said Musk’s assertion sounded like a statement of fact and not merely a projection of Tesla’s future production. If the SEC agrees, Coffee said, it could initiate an inquiry.
There is no doubt that Musk stated on the conference call that Tesla was producing the Models S and X.
"We’re super excited to announce the new Model S and Model X Plaid are in production now and will be delivered in February,” Musk said on the call. “So we have been able to bring forward the Plaid Model S and X – Model S will be delivered in February and Model X a little later. The Model S Plaid, we’re actually in production now, and we’ll be delivering next month.”
Even if Musk’s assertion is protected by disclaimers about production estimates, legal experts say they expect the SEC to at least look into the matter and perhaps open an investigation.
Frenkel said much hinges on whether the SEC finds Musk’s statements to be “material” — that is, something a reasonable investor would find important in deciding whether to trade a company’s shares.
“Production disclosures could be considered material,” Frenkel said.
On the Jan. 27 conference call, Tesla’s chief financial officer, Zachary Kirkhorn, echoed Musk, saying the company was producing S and X models, though Kirkhorn cautioned that the output would be low because of the transition to new versions.
Kirkhorn added that the company was trying to manage a global shortage of semiconductors — a shortage that has bedeviled the entire auto industry, forcing many automakers to cut production. Some analysts have attributed Tesla’s zero S and X production to the chip shortage.
“One cannot disclaim away a false statement or omission to disclose a material fact,” Frenkel said. “Otherwise, it would give no credibility to corporate disclosures.”