Elon Musk Hits Back After SEC Tries to Hold Him in Contempt

The Securities and Exchange Commission says Tesla's CEO violated the agreement that required him to have market-moving tweets preapproved.

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James Lipman

Here's the that got Elon in trouble.

Tesla made 0 cars in 2011, but will make around 500k in 2019

— Elon Musk (@elonmusk)

After a showing off a lovely picture of a shipment of Teslas bound for Europe, Elon Musk tweeted on Feb. 19 that "Tesla made 0 cars in 2011, but will make around 500k in 2019." And then yesterday, he walked back that claim a bit. It's not that Tesla will make 500,000 vehicles this year, Musk clarified. Rather, by the end of the year the company will be making 10,000 cars per week. Extrapolate that rate over the course of a year and you get a production schedule that reaches half a million cars over 12 months.

Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k.

— Elon Musk (@elonmusk)

What happened in between those two tweets? Threats happened. The Securities and Exchange Commission (SEC) said it could charge the Tesla CEO with contempt for breaking the terms of an agreement with the agency last fall.

Twitter was the issue back then, too. You might remember the 2018 incident in which Musk tweeted that he'd to take Tesla private at $420 per share. That wasn't true, and the SEC stripped Musk of his Tesla chairmanship after the incident, though he remained the electric car company's CEO. The agreement also required Musk's social media utterances to go through the company lawyers before they could be posted, . The SEC alleges that he did not do so with the Feb. 19 tweet about making 500k cars in 2019.

In response to the challenge, Musk went on the warpath this morning. He tweeted that "something is broken with SEC oversight," and also claimed he had said on a Tesla earnings call that the company's production for 2019 would come in between 350,000 and 500,000 cars, suggesting that previous public statement would void the agency's case here.

SEC forgot to read Tesla earnings transcript, which clearly states 350k to 500k. How embarrassing … 🤗

— Elon Musk (@elonmusk)

We'll keep you updated on this developing story.

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