{"id":238360,"date":"2023-02-01T12:43:00","date_gmt":"2023-02-01T17:43:00","guid":{"rendered":"https:\/\/www.thedetroitbureau.com\/?p=238360"},"modified":"2023-02-01T13:28:52","modified_gmt":"2023-02-01T18:28:52","slug":"investors-unfazed-as-tesla-reveals-new-sec-probe","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2023\/02\/investors-unfazed-as-tesla-reveals-new-sec-probe\/","title":{"rendered":"Investors Unfazed as Tesla Reveals New SEC Probe"},"content":{"rendered":"\n

Tesla investors appeared to ignore the automaker\u2019s revelation that it\u2019s facing a subpoena from the Securities and Exchange Commission probing its claims about the semi-autonomous Autopilot system. A monthlong rally has helped Tesla shares recover much of the value lost in December.<\/p>\n\n\n\n

\"Tesla
Tesla’s stock has had a bumpy day on the news of SEC subpoenas being issued. The stock’s recovered 70% of its value from its 52-week low.<\/figcaption><\/figure><\/div>\n\n\n\n

Autopilot and the newer Full Self-Driving technologies have come under increasing scrutiny from regulators and consumers alike, critics contending that Tesla has significantly overinflated their capabilities<\/a><\/span><\/strong>, resulting in numerous crashes and some fatalities. <\/p>\n\n\n\n

The automaker faces lawsuits from owners and the families of those killed in Tesla crashes, while regulators in California are looking at the possibility of banning Tesla from selling vehicles in the state. Now, both the SEC and U.S. Department of Justice are looking at Tesla\u2019s claims, probes that could result in fines and even criminal charges.<\/p>\n\n\n\n

\u201cThe company has received requests from the DOJ for documents related to Tesla\u2019s Autopilot and FSD features,\u201d the automaker stated in the annual 10-K report it submitted to the SEC this week.<\/p>\n\n\n\n

Growing scrutiny<\/h2>\n\n\n\n

This won\u2019t be the first time Musk and Tesla have faced the scrutiny of the commission. It has taken the automaker and its CEO to task on several occasions, notably faulting the South African-born executive for his frequent use of tweets in ways that could materially impact the value<\/a><\/span><\/strong> of Tesla stock. Musk has faced millions of dollars in fines and was forced to step down from his additional role as the carmaker\u2019s chairman. But the SEC decided against even more aggressive measures, among them the prospect of forcing Musk to relinquish all executive duties at Tesla.<\/p>\n\n\n\n

\"Tesla
Federal investigators are asking tough questions regarding Tesla’s Autopilot and Full Self-Driving technologies.<\/figcaption><\/figure><\/div>\n\n\n\n

For the moment, at least, shareholders appear unconcerned. Tesla shares rose nearly 4% on Tuesday and, as of mid-morning Wednesday were up again by nearly a dollar, to around $174. However, they dipped down before recovering back to the $174 range by early afternoon. That marks a more than 70% increase from the $101.81 low it hit in the final days of 2022. At that point, it had lost more than $800 billion in market capitalization<\/a><\/span><\/strong> for the year. But, with a current market cap of nearly $548 billion, it\u2019s still sharply down from its 2022 peak of about $1.2 trillion.<\/p>\n\n\n\n

Whether they\u2019ll remain sanguine likely depends upon what happens in the weeks and months ahead regarding the various challenges facing Tesla\u2019s autonomous technologies.<\/p>\n\n\n\n

Crashes and fatalities<\/h2>\n\n\n\n

Autopilot and Full Self-Driving now have been linked to dozens of crashes, a number of them fatal. That has raised concerns about the safety of those technologies. An investigation now underway by the National Highway Traffic Safety Administration could lead to the costly recall of more than 800,000 vehicles. The acting head of NHTSA this month said she has taken steps to speed up the probe. The safety of those technologies has been raised in a number of lawsuits filed by survivors of Tesla crashes and families of those killed.<\/p>\n\n\n\n

But the SEC probe is coming from a different angle, questioning whether Tesla intentionally misled customers by overstating the capabilities of the semi-autonomous technologies. That concern has also been raised by at least one current Tesla owner lawsuit, as well as an investigation by the California Department of Motor Vehicles. If the DMV rules against the automaker it could levy fines or even block Tesla from selling vehicles in the country\u2019s largest market for EVs.<\/p>\n\n\n\n

\"Tesla
CEO Elon Musk’s long touted the capability of Full Self-Driving, but the technology is still in the testing stage and won’t be Level 5 capable when it does arrive.<\/figcaption><\/figure><\/div>\n\n\n\n

The SEC and Justice Department could take a number of actions, the Reuters news service raising the prospect of criminal sanctions.<\/p>\n\n\n\n

Did Tesla intentionally mislead customers?<\/h2>\n\n\n\n

At the heart of the issue is whether Tesla has intentionally misled consumers to believe Autopilot and FSD are true, hands-free systems. Critics have pointed to an early video released by the automaker implying such capabilities, as well as e-mails from Musk ordering edits to the video. Testimony by the current head of the Autopilot development team in an ongoing lawsuit has also raised questions about Tesla\u2019s marketing strategy.<\/p>\n\n\n\n

On its corporate website, the automaker notes that drivers must keep their hands on the steering wheel while operating in Autopilot mode.<\/p>\n\n\n\n

Concerns about Autopilot and Full Self-Driving \u2014 both from a technical and marketing perspective \u2014 are among the many issues the automaker faces. It\u2019s facing a growing assortment of challengers, with the number of all-electric vehicles tripling last year and expected to grow again sharply in 2023. Rising inflation and interest rates pose additional changes, Musk has said on several occasions. And Tesla\u2019s once pristine image among current and potential buyers appears to have been tarnished by the CEO controversial behavior since completing his $44 billion acquisition of Twitter last October.<\/p>\n\n\n\n

Investors unfazed<\/h2>\n\n\n\n

But investors were buoyed by the company\u2019s latest earnings and sales results and Musk\u2019s upbeat forecast going forward.<\/p>\n\n\n\n

He has also hinted that demand surged this month as a result of the sharp price cuts announced for products like the Tesla Models 3 and Y.<\/p>\n\n\n\n

Ford has responded by ordering discounts for its all-electric Mustang Mach-E, but General Motors and Volkswagen have indicated they will not cut prices for their own EVs in response to the move by Tesla.<\/p>\n","protected":false},"excerpt":{"rendered":"

Tesla investors appeared to ignore the automaker\u2019s revelation that it\u2019s facing a subpoena from the Securities and Exchange Commission probing its claims about the semi-autonomous Autopilot system. A monthlong rally has helped Tesla shares recover much of the value lost in December.<\/p>\n","protected":false},"author":2,"featured_media":237432,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[7,8,5,1169,4344,1347,9],"tags":[9600,4093,386,9601,5446],"make":[],"post-state":[],"category_old":[],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/238360"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=238360"}],"version-history":[{"count":6,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/238360\/revisions"}],"predecessor-version":[{"id":238380,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/238360\/revisions\/238380"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/237432"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=238360"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=238360"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=238360"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=238360"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=238360"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=238360"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}