CEO Elon Musk Could Face Scrutiny For Questionable Comments

During a conference in January 2021, Tesla CEO Elon Musk said that the company was producing new versions of its oldest models, the S sedan and X large SUV according to a report from ETAuto. He also reportedly mentioned that the Plaid version of the Model S would be available in February. The top chief of the electric carmaker could face scrutiny for his questionable comments that he had made during the conference to wall street analysts involving Tesla's vehicle production.

Also Read: Tesla Tells China Car Cameras Not Activated Outside North America​

Recently, the company released delivery and production figures and none of either model was produced during the quarter. Interestingly, Tesla produced over 1.8 lakh vehicles from January to March including Model 3 and Model Y SUV. However, the company had delivered just 2,020 units of Model S/X during the same period.

Tesla produced over 1.8 lakh vehicles from January to March including Model 3 and Model Y SUV.

Elon Musk during the conference said, "We're super excited to announce the new Model S and Model X Plaid are in production now and will be delivered in February. 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."

Experts believe that the discrepancy between Elon Musk's statement during the conference and production figures that showed zero production could draw the attention of the U.S. Securities and Exchange Commission. We know that Musk has faced many such discrepancies over questionable comments he has made on Twitter which has also affected the company's share price.

Anthony Sabino, an attorney and law professor at St. John's University said, "I think he might have himself into a bit of trouble with the SEC. These are fairly direct statements. They are fairly unequivocal."

Also Read: Apple CEO Tim Cook Hints At Car Project Being Still Alive; Praises Tesla​

Tesla produced zero Model S or Model X cars during the first quarter of 2021.

John C. Coffee Jr., a Columbia University professor who leads 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."

He also mentioned that, "Tesla could argue that Musk's statement was only a prediction and not a declaration of fact, and that something later happened to alter that prediction. If regulators agree, Musk's statement would be protected by Tesla's standard disclaimers about the uncertainty of forward-looking statements."

Jacob Frenkel, former SEC enforcement attorney said, "One cannot disclaim away a false statement or omission to disclose a material fact. Otherwise, it would give no credibility to corporate disclosures."

Source