The Omicron effect on the markets was not enough. Nor did the Fed swerve which had weighed, at the end of last week, especially on technology. Tesla in the last three sessions had lost 11%. Let’s also consider the sale of 10% of the shares announced by the CEO Elon Musk, after a now famous Twitter poll that ended up in the eye of the storm, even by the market authorities. Well, that’s not all. Yesterday, the SEC opened an investigation into the Palo Alto company, famous for its electric cars, but also for Musk’s own ambitions for Martian conquests.
It is not the first. There is one underway from the National Highway Traffic Safety Administration on the alleged unreliability of the driving assistance system, the so-called autopilot, suspected of a series of accidents in which the car has escaped the driver’s control. The new complaint does not concern cars. It starts with a whistleblower’s report that the company has not been sufficiently transparent with its shareholders and customers about the fire risks associated with alleged defects in its solar panels used for photovoltaic systems and roofs, and this for several years.
In the first hours of trading, the stock fell by more than 6%, to around $ 950, therefore below the threshold of one thousand, for a trillion capitalization, exceeded on 25 October. It is a far cry (-23%) from the highs, 1,229.9 dollars, of November 4th. Then it showed resilience by temporarily regaining positive territory and the trillion market cap. In the end, sales prevailed (-0.59%) for the fourth consecutive session, but the price held, however, at $ 1009.
Fears about possible fires in Tesla’s solar systems are nothing new, but this is the first investigation opened by the Securities and Exchange Commission. The news was confirmed thanks to a response to a Freedom of Information Act-based request from Steven Henkes, a former Tesla quality manager, who filed a complaint in 2019 and then asked the agency for information. Henkes is a former quality manager at Toyota and was fired from Musk’s company in August 2020. He later sued Tesla claiming he was retaliated for raising the issue. In the complaint, Henkes said Tesla and SolarCity, acquired in 2016, did not admit, among other things, that the fires could be caused by faulty electrical connectors.
Tesla had told consumers that maintenance was required on the solar panel system to avoid a failure that could have shut down the system. But it didn’t warn about fire hazards or report problems to regulators, Henkes said.