Tesla sharply ups Model 3 production in third quarter

Tesla sharply ups Model 3 production in third quarter

Coming under pressure from his lawyers and investors of Tesla, tech billionaire Elon Musk has agreed to step down as chairman of the company for three years and pay a $20 million fine in a deal with the U.S. stock market regulatory authority, Securities and Exchange Commission (SEC), to resolve securities fraud charges.

The billionaire entrepreneur was fined $20m (£15m) and agreed to step down as chairman of the electric car-maker as part of the deal with the US Securities and Exchange Commission (SEC).

Musk said August 7 in a company blog post that he was considering taking Tesla private at $420 per share, representing a 20% premium over the stock price following the company's second-quarter earnings release.

Neither Musk nor Tesla admitted or denied the SEC's findings as part of the settlement, which still must be approved by a court.

But several experienced litigators also said that, while the Justice Department inquiry is separate, the SEC's settlement might mark the end of official action against Tesla and Musk.

Elon Musk may be starting to put those take-private tweets behind him, but his fortune will need more time to recover despite a big boost on Monday.

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In August, CEO Elon Musk proposed, then abandoned, plans to take the company private. As CEO, Musk will essentially remain in day-to-day charge of the firm, but he will likely face more oversight and control from the board and the new chairman.

In addition, Tesla continues to lack access to cash incentives available to locally produced electric vehicles in China that are typically around 15% of MSRP or more.

The extraordinary support for Musk and the Tesla brand is underlined by the company's huge valuation - which is very much a bet on the future - and the extraordinary reports this past week or so o Tesla enthusiasts volunteering to help Tesla make the deliveries needed to reach its targets. Musk tweeted only once since the settlement was announced - posting a music video by rap group Naughty by Nature. But Musk has pledged to post profits in future quarters, and the encouraging third-quarter production numbers may allow Tesla to post a third-quarter profit.

Musk, a co-founder of Tesla, is the company's largest stockholder, owning approximately 22 per cent of its outstanding shares.

Deliveries reached a record 83,500, above Wall Street estimates of 80,000 and including nearly 56,000 of the Model 3 sedan whose ramp-up is widely seen as crucial to the company's drive to become profitable. The tweets had no basis in fact, and the ensuring market chaos hurt investors, the SEC said.

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