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Tesla faces increased pressure as US Department of Justice expands inquiry

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2023-10-24

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The US Department of Justice is reportedly expanding its inquiry into Tesla's business practices, adding to the pressure on Elon Musk and the company's board. Initially focused on reports of issues with Tesla vehicles and awards to senior managers, the investigation has now broadened to include scrutiny of the range of Tesla vehicles on a full charge and "personal benefits" provided to high-ranking executives or large shareholders.

Recent news reports have suggested that Tesla may have misled customers about the range of its vehicles, prompting the government to subpoena documents related to personal benefits and unidentified "related parties." The US attorney's office in New York is also investigating whether funds were misused in a planned house for Elon Musk near the company's factory in Austin, Texas.

Tesla, in a quarterly report to the Securities and Exchange Commission, stated that no government agency had concluded any wrongdoing in ongoing investigations and that the company was cooperating with authorities. However, reports from Reuters and Consumer Reports have claimed that Tesla cars fell short of the range indicated by the Environmental Protection Agency, even in warm weather conditions.

Tesla's shares have declined by 13% in value since the company reported a 44% drop in profit in the third quarter, intensifying the challenges facing the electric vehicle maker.

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