Tesla Says Justice Department, SEC Are Investigating Model 3 Production Targets (cnbc.com)

Tesla said in a regulatory filing Friday that the SEC and Justice Department are investigating their Model 3 production projections to see if they misled investors. CNBC reports: The filing confirms much of an Oct. 26 article in The Wall Street Journal that said FBI agents were looking at whether Tesla misled investors about production of its Model 3 sedans. The FBI is the principal investigative arm of the Justice Department. The SEC, which just settled its securities fraud investigation against CEO Elon Musk and the company, has separately subpoenaed Tesla for Musk's statements about production rates regarding its popular Model 3 sedan, the company said. DOJ prosecutors have also asked for the same information, although it stopped short of issuing a formal subpoena, the company said in a filing with the SEC. In an interview with Recode's Kara Swisher, Elon Musk denied the validity of the WSJ article.

"The amount of untruthful stuff that is written is unbelievable. Take that Wall Street Journal front-page article about, like, 'The FBI is closing in.' That is utterly false. That's absurd," Musk told Swisher. "To print such a falsehood on the front page of a major newspaper is outrageous. Like, why are they even journalists? They're terrible. Terrible people."

Comments

Re:Journalists are getting themselves extinct

[Rei]

Yeah, they've been seriously cell deprived. It's not enough that between 18650s and 2170s the Tesla-Panasonic alliance is now making 60% of the world's total EV battery capacity - Tesla has also been having to buy cells from other manufacturers to keep their Powerwall and Powerpack production going. Tesla's been consuming cells like a beast, mainly for Model 3, and it's impacting their other product lines.

Panasonic has been lagging, but they're trying to catch up. At the end of Q3, GF1 was producing 2170s at an annualized rate of around 20GWh/year (current global production for EVs is around 40GWh/year). Panasonic is installing three of its new, faster line design (joining the 10 lines of their older design); this is expected to bring them up to 35GWh/year by March.

Gotta love those sorts of scaling factors. We live in interesting times.

BTW, Panasonic has stated that they're not going to be building out lines in Shanghai next year, although might in the long-term. Their capital is currently focused on GF1. Model 3 production at GF3 will be started using a mix of cells, both imported from GF1 and from local Chinese manufacturers. From the 10-Q, it looks like they're planning to take the route I laid out on TMC a couple weeks ago:

  * Fremont's lines are all designed for 10k/wk production rates, but some - namely, paint and GA (general assembly), look likely to bottleneck out at 7k/wk. Upping these rates would require meaningful investment and/or downtime to boost to 10k - but Tesla doesn't really need 10k/year in the US. The body, stamping and plastics lines all look ready for 10k.
  * Tesla has already started site work at Shanghai. Their first step will be to have it leveled and prepped, with utility and transport connections in place. A factory is worthless if things and people can't move smoothly in and out.
  * GA lines are the fastest and easiest to build; Tesla made one in a month out of scrap in Q2 this year. I expect them to have the first GA line up in late Q2 of next year.
  * Paint lines are more complicated to get running smoothly and consistently. I expect them to open their first paint line in Q3/Q4 of next year.
  * At this stage, they'll import BIWs (Body In Whites), made using the extra 3k capacity in the body, stamping and plastics lines at Fremont, and finished packs and drive units from GF1. So Fremont will be at 7k and GF3 at 3k. BIWs will need either dry packaging or temporary anti-corrosion coatings for shipping, so Tesla will have to prep for this.
  * Stamping, plastics, body, pack, and cell production will come on line in early '20, along with new GA and paint lines to ramp local production (specifically, to add Model Y production into the mix). This also frees up 3k capacity at Fremont and GF1.
  * In the meantime, GF4 prep work, the first GA line, and the first paint shop will have been completed in Germany (early '20, 2-3 quarters behind Shanghai). So the extra BIWs, drive units and packs get shipped to GF4, and the Shanghai process repeats.