(Reuters) – The U.S. Department of Justice has requested documents concerning Tesla’s electric vehicles’ driving range, the company announced on Monday. This comes after a July Reuters report that highlighted possible overstatement of the vehicles’ potential driving distance. The Justice Department is also investigating Tesla’s self-driving feature, personal benefits, and personnel decisions. This marks a significant escalation of regulatory scrutiny for the company led by Elon Musk.
Tesla disclosed in a regulatory filing that its capital expenditure for 2023 will exceed the previously stated target of $7 billion to $9 billion. The increased spending is attributed to the ramp-up of production at its factories and the upcoming release of new models. Tesla expects to commence shipments of the redesigned Model 3 compact sedan and the Cybertruck, inspired by the movie “Blade Runner,” in the last quarter of the year. However, production delays and lower deliveries in the third quarter due to factory retooling affected the company’s earnings.
The regulatory filing also revealed that Tesla’s spending will return to the $7 billion to $9 billion range in the next two years. Meanwhile, CEO Elon Musk expressed uncertainty about plans for a factory in Mexico due to the uncertain economic outlook. Musk warned that rising interest rates and a price war to maintain sales could potentially impact demand for Tesla vehicles.
In a recent post on a social media platform, Musk stated that Tesla is currently engaging in advertising on a small scale and plans to expand its advertising efforts as they determine the most effective strategies. This represents a departure from Tesla’s previous stance of refraining from traditional advertising, relying instead on Musk’s celebrity status and customer enthusiasm for their vehicles.
Tesla shareholders, including The Future Fund’s managing partner Gary Black, have been urging the company to advertise, asserting that price cuts alone have not significantly impacted demand. Pre-market trading saw Tesla’s shares decrease by almost 1% in line with a general market decline.
Reporting by Aditya Soni and Juby Babu; Editing by Maju Samuel and Savio D’Souza
