Consumer Reports is pulling its recommendation of Tesla Model 3, citing reliability issues with the car.

Tesla buyers are more likely to be satisfied with their car than customers of any other brand, according to Consumer Reports. Yet the publication says many customers reported problems with the Model 3, including loose body trim and glass defects.

"Consumers expect their cars to last — and not be in the repair shop. That's why reliability is so important," said Jake Fisher, senior director of automotive testing at Consumer Reports.
Tesla (TSLA) pointed to its overall customer satisfaction rating from Consumer Reports and said it has corrected many of the problems found in the survey.

SEC Asks Manhattan Federal Court to Hold Elon Musk in Contempt

Regulator cites Feb. 19 tweet regarding projected production volumes in 2019

Feb. 25, 2019

The Securities and Exchange Commission on Monday asked a federal judge to hold Tesla Inc. Chief Executive Elon Musk in contempt of court over tweets he made last week discussing the auto maker’s projected production volumes in 2019.

In a federal court filing late Monday, the SEC said Mr. Musk violated a condition of his settlement with the regulator last year, when he was accused of tweeting misleading information about taking Tesla private. Mr. Musk’s deal with the SEC required that Tesla officials preapprove any statements from Mr. Musk that could affect the company’s stock price.

A Tesla spokesman and Mr. Musk didn’t immediately respond to requests for comment.

In a series of Twitter messages on Feb. 19 that began as a celebration over Tesla vehicles prepared for shipment to Europe, Mr. Musk noted how the auto maker had seen large growth in recent years. “Tesla made 0 cars in 2011, but will make around 500k in 2019,” he said in one posting at 4:15 p.m. California time.

The suggestion that Tesla would make 500,000 vehicles this year stood in contrast to previous guidance by the company on Jan. 30. In his quarterly shareholder letter, Mr. Musk told investors that Tesla would reach an annualized build rate of 500,000 Model 3s sometime between the fourth quarter and second quarter of next year. Tesla planned to deliver as many as 400,000 in all of 2019.

More than four hours after his tweet on Feb. 19, Mr. Musk clarified in another message, saying, “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.”

The SEC said in its filing that Mr. Musk “did not seek or receive pre-approval prior to publishing this tweet, which was inaccurate and disseminated to over 24 million people.”

Federal Judge Gives Musk Until March 11 to Answer Contempt Claims

Feb. 26, 2019 11:59 a.m. ET

Tesla Inc. Chief Executive Elon Musk has until March 11 to answer federal regulators’ claims that tweets he issued last week violated an enforcement settlement he reached last year, a federal judge decided Tuesday.

U.S. District Judge Alison Nathan ordered Mr. Musk to respond to the Securities and Exchange Commission’s motion, filed late Monday, which asked her to find the Tesla leader in contempt of court. The SEC argues that Mr. Musk’s Twitter messages on Feb. 19 violated a condition of his earlier fraud settlement, which required the company to preapprove any of his potentially market-moving statements.

Judge Nathan approved the settlement in October, which focused on tweets Mr. Musk disseminated on Aug. 7 saying he might take the auto maker private and had the funding to do so. Tesla’s shares immediately soared but fell in later days when The Wall Street Journal and others reported that Mr. Musk and his advisers were still trying to line up potential investors and buyers.

The SEC argued Mr. Musk’s August tweets were misleading and violated laws that require public companies and their officers to speak truthfully to investors.

After an investigation, Mr. Musk reached a deal that allowed him to stay as Tesla’s CEO but required him to give up his role as chairman. Mr. Musk and Tesla also each agreed to pay a fine of $20 million. In addition, the CEO accepted conditions that required Tesla officials to read and approve any of his market-moving tweets before he issues them publicly.

Tesla suspends orders on website ahead of 5 pm ET announcement

Electric carmaker Tesla suspended all orders on its website and redirected users to a page teasing a mystery announcement CEO Elon Musk said is coming at 5 p.m. ET Thursday.

Users who attempt to go to any of the company’s ordering pages are redirected to a site that says: “The wait is almost over. Great things are launching at 2pm.”

Whatever Tesla will launch is still a mystery. Investors have been expecting updates on several fronts, including the arrival of Tesla’s long-promised $35,000 Model 3, a version of the sedan Tesla has been promising since it unveiled the car in 2016.

This story is developing. Check back for updates.

Electric carmaker Tesla is finally launching its long-awaited standard Model 3 starting at $35,000 and shifting all sales online, the company said.

The company's shares were halted, and Tesla suspended all orders on its website ahead of Thursday's news. It also redirected users to a page teasing a mystery announcement CEO Elon Musk promised to reveal at 5 p.m. ET.

The base model of the Model 3 will have 220 miles of range, a top speed of 130 miles-per-hour and accelerate from 0 to 60 mph in 5.6 seconds, the company said.

"You can now buy a Tesla in North America via your phone in about 1 minute, and that capability will soon be extended worldwide," the company said, adding that it is also allowing customers to try out the car before buying. It's offering full refunds if a car is returned within seven days or 1,000 miles.

Tesla has been promising a $35,000 version of the Model 3 ever since the automaker revealed the mid-size sedan in 2016. But it's prioritized the production of more expensive versions of the car in order to keep profit margins high. Musk has defended the decision by saying that making lower-priced versions was unprofitable and would cause Tesla to "die."

Tesla customers describe maddening problems with returns and refunds

Feb 21 2019
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• Tesla CEO Elon Musk frequently touts the company’s refund and return policy when encouraging people to buy his company’s electric vehicles.
• Today, some Tesla customers say the company left them stressed and stranded, waiting months to be paid back for returned cars or canceled reservations.

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In extreme cases, Tesla left customers waiting for months beyond the date when sales or customer service personnel had originally promised to repay them, they say. In one case, a refund check for a $1,000 reservation fee bounced. In another, Tesla did not refund the $1,000 reservation fee, but instead sent a $40,000 check for a car that the customer never took possession of. In both cases, Tesla says it is now working with the customers on a resolution.

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Tesla faces a cash crunch with a $920 million debt payment due Friday

Wed, Feb 27 2019

On Friday, close to $1 billion in debt comes due for Tesla, an obligation that will wipe out about a quarter of the company’s cash.

According to regulatory filings, Tesla has $920 million in convertible senior notes set to expire on March 1, at a conversion price of $359.87 per share. Tesla’s stock hasn’t traded above $359 for weeks, and closed Tuesday at $297.86.

If the shares were valued at the conversion price, the bonds could convert into Tesla stock, and Tesla wouldn’t need to pay the debt in cash. But in the absence of a major share rally this week, the electric vehicle maker will have to make the payment in cash.

In its 2018 annual report, Tesla said it had $3.69 billion in unrestricted cash and equivalents to end the year. Former hedge fund manager Darius Brawn said the debt payment could put Tesla in a cash crunch, unless the company sees exceptional Model 3 sales next month.

“If March doesn’t go gangbusters for Tesla they are in real trouble, especially without raising,” said Brawn, who worked as a portfolio manager for Citadel, SAC and Sharpe Point. Brawn added that he doesn’t think the company can raise while CEO Elon Musk clashes with the Securities and Exchange Commission.

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We stopped taking Model 3 reservations in North America in early July 2018 when we moved to a direct order system. Of the 455,000 net reservations that we reported in August 2017, less than 20% have cancelled. We are expecting most of the remaining reservations to gradually convert to orders as we launch more versions of Model 3, introduce other financing options, and begin sales outside North America.