Tesla Autopilot probe widens to include the SEC: Can Musk's secret plan fix this?

July 12, 2016

Less than two weeks ago, we reported on a fatal crash in Florida involving a Tesla Model S sedan in self-driving, Autopilot mode. The National Highway Traffic Safety Administration began its investigation of the collision on June 28, and yesterday, we learned that the National Transportation Safety Board had taken the unusual step of getting involved, too.

Now, there's news that the Securities and Exchange Commission is also investigating the matter, which could have implications of a different sort for Tesla. How will the automaker and its outspoken CEO, Elon Musk, recover?

SEC probe

The SEC investigation hinges on Tesla's delay in going public with information about the Autopilot crash. Though it occurred on May 7, Tesla didn't make mention of the collision until weeks later, on June 30, when it published a blog post detailing some of the key facts. (Coincidentally, June 30 is also when NHTSA announced its investigation of the crash.) 

And that, according to the SEC, may be a violation of securities law. The agency's investigation is meant to figure out whether the collision qualifies as a "material" event--one that could affect the value of Tesla stock and therefore, one that should've been announced to investors.

Complicating matters is the fact that Tesla was in the midst of fundraising when the fatal crash occurred. The company raised a total of $1.46 billion in a stock sale that wrapped up on May 19.

Curiously, Tesla stock has continued to climb in value, even after news of the collision began making headlines. On June 30, shares closed just over $212, and they're currently trading around $224.

Neither the SEC nor Tesla have commented on this particular investigation yet. Word of it comes from the always-knowledgeable "people familiar with the matter".

Secret plan

News of the SEC probe comes at the end of a very long couple of weeks for Tesla. Apart from reports about the May 7 collision and the investigations involving NHTSA, the NTSB, and now, the SEC, Tesla has also been dealing with reports of two non-fatal crashes--one in Pennsylvania, the other in Montana. Reports suggested that drivers in both incidents were using Autopilot at the time, though there's no proof of that yet.

On Sunday, however, Musk posted a tweet that had nothing whatsoever to do with Autopilot or accidents:

What could that mean? Musk hasn't published any additional details, but he did seem to agree on one person's projections:

The article to which Musk responded was written by Jigar Shah. It envisions Tesla's purchase of SolarCity, which would create a vertically integrated, renewable energy-using, battery-powered powerhouse. More importantly, it would position Musk and Tesla at the forefront of the slow-but-steady green energy revolution.

If that's the case--if that's at the core of Musk's secret plan--would the details be enough to distract fans and investors from the grim headlines about Autopilot? We're not entirely sure, but we're curious to see what all the fuss is about.

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