Friday, September 28, 2018

Musk's Tesla position uncertain as US regulators sue Musk for fraud

The future of Tesla looks increasingly uncertain, with US regulators having filed a lawsuit this week against the automaker’s high-profile CEO, Elon Musk.

According to Reuters, the Securities and Exchange Commission (SEC) moved to sue Musk for fraud, for tweets claiming he had "Funding secured" to take the publicly-floated company private, which never materialized.

Tesla’s share price tumbled 12% in after-hours trading after the announcement of the lawsuit, which could potentially see Musk landed with a substantial fine and even removed from his position as the head of Tesla – or any publicly traded organization.

Dude, where's my car?

It’s no secret that Tesla has faced considerable financial challenges in the past year, with numerous production delays for its Tesla Model 3 sedan and a volatile share price on the stock market.

Tesla has always weathered these storms, and its continued ability to stay afloat amid these challenges is enough to convince many that the electric car company will be around for a while yet. 

But without Musk as a figurehead, the sort of company strategy, brand image, and vehicles seen from the company could easily take a different turn. 

The recent Tesla Model 3 was hoped to expand Tesla's customer base to more of middle-income America, and may present two different directions for the company: either to aim for a wider user base or focus on returns in the high-end market.

Tesla’s ‘disruptive’ status has been dependent on the impulses of its CEO and highly ambitious timeframes – though any change to leadership may just mean Tesla starts to operate more predictably as an automaker.



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