Elon Musk and his entourage arrived at court in two Teslas on Thursday as he prepared to square off against the SEC over his tweets.
The CEO’s arrival came hours after the company’s stock plummeted 10 percent following a 30 percent shortfall in deliveries.
A federal judge will hear oral arguments Thursday about whether Musk should be held in contempt of court for violating an agreement with the U.S. Securities and Exchange Commission.
They say Musk violated the settlement when he tweeted about Tesla’s vehicle production in February without a lawyer’s approval.
Musk said Thursday as he entered a courthouse in Manhattan that he has great respect for the justice system and thinks judges in the American system are outstanding.
Musk and his team arrived Thursday in a dual motor Model 3 and a Model S sedan.
Elon Musk arrives at New York Federal Court on Thursday in two Teslas and flanked by his large team of lawyers and security
The CEO’s arrival came hours after the company’s stock plummeted 10 percent following a 30 percent shortfall in deliveries. Musk is pictured center
A federal judge will hear arguments Thursday about whether Musk should be held in contempt of court for violating an agreement with the U.S. Securities and Exchange Commission
Musk said Thursday as he entered a courthouse in Manhattan that he has great respect for the justice system and thinks judges in the American system are outstanding
Tesla share dropped by 10 percent on Thursday at the start of trading after the company announced its car deliveries for the first quarter of the year were down 30 percent from last year’s final quarter
Tesla’s stock plummeted by 10 percent on Thursday morning after the company announced deliveries for the first quarter of the year had dropped by 30 percent.
The company delivered 63,000 vehicles in the last three months, nearly 30,000 behind the 90,700 it delivered in the final quarter of 2018 and a long way off the approximately 73,500 analysts had predicted it would.
It made produced 77,100 cars but said that due shipping to Europe and China for the first time, delivery rates across the US were stunted.
Half of the quarter’s total deliveries were made in the last 10 days, it said.
Of the 63,000 cars delivered, 50,900 were Model 3s and 12,100 were Models S and X. In its announcement, the company said orders for Model 3s ‘significantly outpaced’ what it was able to deliver.
‘Due to a massive increase in deliveries in Europe and China, which at times exceeded 5x that of prior peak delivery levels, and many challenges encountered for the first time, we had only delivered half of the entire quarter’s numbers by March 21, ten days before end of quarter.
Tesla CEO Elon Musk’s lawyers will appear before a hearing in New York on Thursday to argue his case against the SEC
‘This caused a large number of vehicle deliveries to shift to the second quarter. At the end of the first quarter, approximately 10,600 vehicles were in transit to customers globally.’
Despite the slow-down, the company maintained its earlier projection that it would deliver between 360,000 and 400,000 vehicles by the end of the year.
‘Despite pull forward of demand from Q1 2019 into Q4 2018 due to the step down in the federal tax credit, US orders for Model 3 vehicles significantly outpaced what we were able to deliver in Q1.
‘We reaffirm our prior guidance of 360,000 to 400,000 vehicle deliveries in 2019,’ it said.
The announcement drove stocks down to $261, marking a near ten percent drop.
It also coincided with CEO Elon Musk’s showdown against the Securities and Exchange Commission which claims he violated their agreement by posting on Twitter about the company without its permission.
Last year, Musk agreed to step down as chairman of the company and to dial down his tweets about the company’s affairs after sending the industry into a flurry by claiming he was taking Tesla, a publicly traded company, private for $420 a share.
As part of the agreement, he is supposed to seek approval before tweeting anything that could impact shares.
Of the 63,000 cars it delivered in Q1, the majority were Model 3s, Tesla’s most affordable electric car which costs $35,000. It said it was ‘outpaced’ by orders for the vehicle from all over the world
These are the tweets the SEC says are in violation of Musk’s agreement not to tweet about materials which could impact Tesla shareholders without permission. He says the tweets were innocent and no different to the projections Tesla had already announced
He has dismissed the requirement in interviews and on February 19, tweeted: ‘Tesla made 0 cars in 2011, but will make around 500k in 2019.’
He then clarified: ‘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.’
Tesla had predicted that it would make at least 500,000 Model 3s, its cheapest car, and deliver between 300,000 and 400,000 by the end of the year at the end of January.
Musk’s lawyers say his tweet as in no way different to that outcast and that he was merely repeating public information.
The SEC dubbed Musk’s tweet ‘obviously different’ from that forecast and called it a ‘blatant violation’ of their agreement.
On Thursday, Musk’s team is due to appear before a Manhattan court to argue his case against the commission.