Tesla Faces DoJ Investigation Following Elon Musk’s Funding Tweet

Troubled electric car company Tesla is now facing a criminal investigation from the US Justice Department in the wake of CEO Elon Musk’s August 7 tweet about taking the company private.

The Bloomberg report, which cited two unnamed sources “familiar with the matter,” claimed the DoJ investigation is in the early stages, could take months, and may end with prosecutors deciding against filing charges.

The fuse for the explosive announcement was lit when Musk tweeted that he was considering a buyout of the publicly held company and had secured funding for it.

Less than three weeks later, those plans went off the table.

In a blog post at the time, Musk told investors he had decided Tesla was better off remaining public after all, and called the now-infamous tweet regarding funding “premature.”

News of the Justice Department probe sent Tesla shares tumbling and talking heads bloviating; Bob Lutz, former vice chairman of American carmaker (and Tesla competitor) General Motors, called Tesla an “automobile company headed for the graveyard.”

Lutz also took the opportunity to claim that while Musk is a nice guy, he doesn’t know how to run a car company.

“They will never make money on the Model 3 because the cost is way too high, he said. “He’s got 9,000 people in that assembly plant producing less than 150,000 cars a year. The whole thing just doesn’t compute.”

Meanwhile the beleaguered carmaker sent out a boilerplate statement to news organizations, noting Tesla has not received a subpoena, a request for testimony, or any other formal process.

“Tesla received a voluntary request for documents from the DOJ and has been cooperative in responding to it,” the statement read. “We respect the DOJ’s desire to get information about this and believe that the matter should be quickly resolved as they review the information they have received.”

Bad news for the electric carmaker hasn’t exactly been in short supply this year, and just last week, it was reported over-the-air updates to the latest version of Tesla’s Autopilot system have left some owners temporarily unable to use the feature at all.

In addition, the much loved electric-car pioneer still faces a looming cash crunch, supplier issues, growing competition and the uncertainty that goes along with being led by the brash and unorthodox leadership style of Musk.

While the company struggles to meet production target goals and deals with the fallout from accidents involving the Autopilot system, rival automakers from across the globe are releasing their own electric vehicles.

German automaker Audi is the latest carmaker to join the electric vehicle club, taking the wraps off its $75,000 E-tron battery-electric SUV this week at a large-scale event near San Francisco that signaled the significance of all-electric vehicles for the company’s future.

Rival Volkswagen announced that by the end of 2022, its all-electric MEB platform will form the basis of 27 models from four Volkswagen Group brands — the company expects to sell 150,000 MEB-based cars by 2020.

— Nathan Eddy is a filmmaker and freelance journalist based in Berlin. Follow him on Twitter.