The U.S. Justice Department is reviewing Tesla’s claims regarding the driving range of its electric vehicles and other aspects of its operations.
Justice Department requests Tesla’s documents related to vehicle driving range claims.
Tesla anticipates its 2023 capital expenditure to surpass its initial $7-9 billion forecast.
CEO Elon Musk reveals potential advertising plans and concerns over a challenging economic landscape.
Reuters has disclosed that the U.S. Justice Department is requesting documents from Tesla to investigate the automaker’s assertions about the driving range of its electric vehicles. This move comes after previous reports suggesting the company might have overstated the potential driving distance of their vehicles. The regulatory body is also examining Tesla’s autonomous driving features, as well as certain benefits and personnel decisions, signaling heightened regulatory attention towards the Elon Musk-headed firm.
Moreover, Tesla has recently updated its financial forecasts, indicating that its capital expenses for 2023 might surpass the previously estimated range of $7 to $9 billion. This uptick is attributed to the company’s efforts to increase production in its factories and introduce new vehicle models. Consumers can anticipate the release of the updated Model 3 sedan and the futuristic Cybertruck in the coming months, following certain production adjustments made in the previous quarter.
Although the company’s financial outlay is projected to realign with the earlier $7-9 billion estimate in the subsequent years, there are other concerns on the horizon. Elon Musk, in a recent earnings discussion, expressed apprehension regarding Tesla’s plans for a new factory in Mexico, citing a volatile economic environment. He also highlighted the potential adverse effects of increasing interest rates and competitive pricing pressures on Tesla’s demand.
Lastly, Musk indicated Tesla’s tentative foray into advertising. On the X social media platform, he mentioned the company’s current small-scale advertising efforts, with plans to expand upon determining the most effective strategies. This marks a shift from Tesla’s longstanding reliance on Musk’s influential presence and the brand’s strong customer base. Some stakeholders, including Gary Black of The Future Fund, have encouraged Tesla to adopt advertising, opining that mere price reductions might not significantly boost demand. In the backdrop of these developments, Tesla’s stock experienced a slight dip in the premarket session amidst a generally subdued market.