Top 4th of July Sales Best 4K Projectors 7 Early Prime Day Deals Wi-Fi Range Extenders My Favorite Summer Gadgets Cheap Car Insurance Target's 4th of July Sale Best Running Earbuds, Headphones

Tesla facing criminal investigation over Model 3 production, report says

The Justice Department is said to be investigating whether Tesla's statements surrounding its Model 3 production numbers in 2017 could be considered fraud.

SpaceX CEO Elon Musk Announces First Private Passenger flight To The Moon
The Justice Department and FBI are reportedly investigating whether Tesla statements regarding Model 3 production constitute fraud.
Mario Tama/Getty Images

Tesla and its CEO Elon Musk may have settled with the Securities and Exchange Commission over misleading tweets last month, but The Wall Street Journal reports on Friday that the Justice Department is now overseeing a criminal investigation of the electric car company.

The Justice Department inquiry reportedly stems from Tesla's claims of its ability to produce the Model 3 at volume in 2017. The federal agency is said to be looking into whether Musk's public claims that Tesla would be building 5,000 Model 3s per week by December of 2017 -- before the company had even started production of the vehicle -- constitutes fraud. It didn't hit that level of production until the end of June 2018.

According to the WSJ's report, FBI agents have been reaching out to former Tesla employees to get them to testify if a criminal case goes to court. The FBI also reportedly sent out subpoenas to ex-employees and sought interviews with them in order to better determine whether Musk's statements were made with the knowledge that there was no way they could be true.

"Earlier this year, Tesla received a voluntary request for documents from the Department of Justice about its public guidance for the Model 3 ramp and we were cooperative in responding to it," a Tesla spokesperson said in a statement. "We have not received a subpoena, a request for testimony or any other formal process, and there have been no additional document requests about this from the Department of Justice for months."

This investigation is another bad bit of news for a company that finally enjoyed a profitable quarter after almost three years of running in the red. The Silicon Valley automaker is also still reeling from the aftereffects of the SEC investigation and subsequent settlement, which mandated that Musk step down as chairman of Tesla's board, though he remains as CEO.