Tesla (TSLA) is encountering a more challenging path ahead as it grapples with disappointing earnings and increasing federal scrutiny of its automated driving systems.
Shortly after reporting earnings that failed to meet Wall Street’s expectations, the electric vehicle manufacturer disclosed that it is facing deeper federal investigations into its autonomous driving technology.
In a recent filing with the Securities and Exchange Commission (SEC), Tesla revealed that it had received requests from the U.S.
Department of Justice (DOJ), including subpoenas seeking documents related to its autopilot and full self-driving features.
The company also indicated receiving requests for information encompassing various areas, such as personal benefits, related parties, vehicle range, and personnel decisions.
A previous report from the Wall Street Journal in August raised concerns about whether Tesla’s corporate funds were used in the construction of a glass house commissioned by CEO Elon Musk.
In its recent SEC filing, Tesla did not clarify whether the glass house is among the specific issues under investigation by the Justice Department.
Tesla had previously disclosed the Justice Department’s requests for information regarding its autopilot and self-driving features in January. However, the revelation of the agency’s use of subpoenas suggests a more severe level of inquiry.
While Tesla did not provide further details about the nature of the subpoena requests, the company emphasized that “to our knowledge, no government agency in any ongoing investigation has concluded that any wrongdoing occurred.”
Multiple news outlets, including Reuters, have reported on concerns that Tesla vehicles often fail to achieve the driving range promised by the company on a full charge.
In addition, last year, Reuters reported that federal prosecutors initiated a criminal investigation into Elon Musk’s statements dating back to 2016 regarding Tesla’s “self-driving” features.
On its website, Tesla explicitly states that its vehicles are not self-driving, and features like automatic braking and lane correction are designed for “fully attentive drivers” who must always keep their hands on the wheel.
These recent probes have further complicated the legal landscape for Tesla as it strives to recover from an earnings report that disappointed analysts.
For the third quarter, Tesla reported revenue of $23.4 billion, falling short of analyst estimates of $24.06 billion. Year-over-year revenue increased by 13%, while adjusted earnings per share (EPS) came in at $0.66, missing the expected $0.74.
The company reported adjusted net income of $2.3 billion, falling short of the expected $2.56 billion.
