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Federal investigators widen Tesla inquiry, says company

The Department of Justice has expanded its inquiry into Tesla’s business practices to include how far its vehicles can travel on a full charge and “personal benefits” to high-ranking executives or large shareholders, the company said without elaborating.

The disclosure followed recent news reports that the carmaker appears to have misled customers about how far its vehicles could travel before needing to be plugged in.

Tesla also said in a regulatory filing that the government had subpoenaed documents related to “personal benefits” and unidentified “related parties,” a term that often refers to top management, company directors or large shareholders.

The US attorney’s office in New York has looked into whether funds were misused in a planned house for Tesla CEO Elon Musk near the company’s factory in Austin, Texas, The Wall Street Journal reported in August. The US attorney’s office did not immediately respond to a request for comment on Monday.

Tesla did not respond to a request for comment.

“To our knowledge no government agency in any ongoing investigation has concluded that any wrongdoing occurred,” the company said in the filing, a quarterly report to the Securities and Exchange Commission. Tesla said it was cooperating with authorities.

Reuters and Consumer Reports have reported that Tesla vehicles fell short, in road testing, of the range indicated by the Environmental Protection Agency, which tests cars on rollers in a laboratory. Carmakers have some discretion in how they configure cars for the tests and can influence the results.

The range of all battery powered cars suffers in cold weather, but a Tesla Model Y sport utility vehicle that Consumer Reports tested fell at least 50 miles short of the claimed range even in warm weather.

The Ford Mach-E and Volkswagen ID.4 SUVs exceeded their claimed warm-weather ranges when tested by Consumer Reports under identical conditions as the Tesla vehicle. A Hyundai Ioniq 5 came within 2 miles of its EPA range.

Tesla had earlier disclosed that the Justice Department had issued subpoenas for documents related to its self-driving software. Tesla is the target of lawsuits claiming the software played a major role in accidents that caused deaths and injuries and does not live up to the claims about its performance made by Musk and the company.

The National Highway Traffic Safety Administration, the National Transportation Safety Board, the SEC, and various local and international authorities have also requested information, Tesla said without providing details.

Tesla’s shares have fallen 13 per cent since Wednesday when the company reported that profit in the third quarter slumped 44 per cent after it slashed prices of its models.

(Published 23 October 2023, 22:13 IST)

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