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Elon Musk tweets another Tesla forecast in midst of talks with SEC - The Japan Times

Elon Musk, already in hot water over his Twitter use, posted another Tesla Inc. production forecast reminiscent of the one that landed him before a federal judge earlier this month.

Musk wrote Sunday that Tesla will make more than 500,000 cars in the next 12 months. A similar tweet sent almost two months ago, in which Musk said the company would build half a million vehicles in 2019, led the U.S. Securities and Exchange Commission to argue he was in contempt of a settlement reached with the regulator last year.

The latest forecast, given as a seemingly innocuous aside in a discussion about the future value of Tesla vehicles, nonetheless came as Musk’s lawyers are negotiating with the SEC over an agreement that put controls on the billionaire’s tweeting. A U.S. judge gave the two sides until Thursday to meet for at least an hour and resolve their differences. If they can’t, she’ll rule whether Musk is in contempt.

The legal tussle for Musk, 47, served as a distraction amid a record decline in deliveries for Tesla during the first quarter. Concerns about demand for Tesla’s vehicles escalated last week after the Nikkei reported the company and its partner Panasonic Corp. were freezing plans to expand capacity at the battery factory they share in Nevada.

The newspaper said that because sales of electric vehicles have been below forecasts, the two companies decided that a major additional investment now posed too much of a risk.

The report came after Panasonic said in a statement Monday that the factory is not operating at its full 35-GWh annual capacity and that it is working on increasing output.

Musk on Saturday disputed Panasonic’s statement, saying the company’s lines were only at 24 gigawatt hours and have been constraining output of Tesla’s Model 3 sedan.

“Pana cell lines at Giga are only at ~24GWh/yr & have been a constraint on Model 3 output since July,” Musk wrote in a tweet Saturday. “Tesla won’t spend money on more capacity until existing lines get closer to 35GWh.”

The Model 3 has been available in the U.S. since 2017, though the pace of sales in the market has slowed following the shrinking of federal tax incentives, and the company has struggled to get the car quickly into Europe and China. In the March quarter, Tesla delivered 63,000 vehicles, down from 90,966 in the final quarter of 2018.

“There is 35 GWh/yr ‘theoretical capacity’, but actual max output is ~2/3,” Musk said in a tweet. “It was physically impossible to make more Model 3’s in Q1 due to cell constraints.”

Both the Panasonic and the next-12-months production tweets are noteworthy in light of the settlement that sprang from Musk tweeting in August of last year about trying to take Tesla private. The SEC accused the chief executive officer of securities fraud, and Musk settled. He agreed to pay $20 million, step down as chairman and seek pre-approval from an in-house securities lawyer before tweeting information material to the EV maker.

Musk’s legal team has argued that he retained discretion to determine whether he was sending out material information or not, and that his Feb. 19 post about Tesla’s 2019 production was consistent with comments he made weeks earlier on an earnings call.

In an April 4 hearing where Musk appeared, U.S. District Judge Alison Nathan questioned the specifics of the CEO’s settlement with the SEC and told the two sides to rework the language of their agreement.

“Take a deep breath, put your reasonableness pants on and work this out,” Nathan said. She wrote in an order the next day that if Musk is held in contempt, the court will allow further briefings on sanctions. The SEC said at the hearing that the remedies it was seeking included a series of escalating fines for future violations, and monthly reporting on Musk’s communications.

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