Tesla Fraud Investigation [Securities & Wire Fraud]

well well well the SEC is back after

Elon Musk and Tesla well actually they

kind of haven't stopped being after Elon

Musk and Tesla for a while now but

Reuters as you've probably already heard

is reporting that there are the

potential wire fraud allegations against

Tesla for misleading statements a

puffery or

misleading basically salesmanship to

investors of Tesla stock for the

performance of full self-driving now

before we get into what all of that

actually means for Tesla I think it's

worth clearing up two things up front

number one I think it's always been

clear that full self-driving is a beta

software and it's quite frankly the best

software that exists on the road today

is it 100% autonomous no of course not

but don't think that it's ever sold as

that now that might not necessarily be

the sec's problem here because quite

frankly I think that would be a hard

problem to win I think the bigger

argument that the SEC has is with Elon

Ms uh Elon musk's Elon Ms oh no Elon

musk's expectations or forecasts around

when certain things would be available

such as when we would hit certain

forecast uh targets for the full

availability of FSD which as we know

keeps getting kicked down the road uh

how many cyber trucks and when we might

see them how many semi trcks and when

when we might see the Roadster these

sorts of patterns of promises that well

they're not

necessarily no longer happening they're

certainly taking a whole lot longer to

achieve and it'll be something where the

SEC might try to use promises that Elon

makes in conjunction with promises

around hey a $25,000 vehicle hey look at

our Dojo supercomputer system hey look

at our 4680 cells and how these will be

the future and soon every car will be

using dojo and 46 80s and soon we'll

have the $25,000 car and the SCC might

try to allege hey well now you're saying

4680 are a hedge well that's not what

you told folks on battery day that

you're really only making these now for

the Cyber truck it was supposed to be

for everything but that's not happening

now because obviously uh Chinese

batteries are quite frankly cheaper

lithium prices have collapsed and some

of the success of the 4680 technology

just hasn't really been up to Snuff same

thing with Dojo Dojo was supposed to be

the

future now it's h100s so I'm not pooping

on those programs but let's be real

investors were sold this and we're

probably you know here making our way up

to there if anything kind of like

bleeding out a little bit on some of

these now what I want to be clear about

is I'm not a Tesla bear this whole video

isn't to say oh you know we should

listen to Reuters and be worried about

Reuters or we need to be uh concerned

about what's going to end up happening

here with the SEC I'm simply trying to

understand and I I thought about this

this morning what could the SEC

potentially strain together we know

they've been investigating Tesla's FSD

since 2020 we know that they've been

subpoenaing folks quite frankly uh at

least since October of 2023 I mean

here's a piece on that Us justice

department has sought documents and

issues subpoenas to Tesla in conjunction

obviously with the Security and Exchange

Commission and then when the SEC finds

something they can refer it to the doj

who can actually file a criminal

complaint so I got to thinking about

this a little

bit what what is this actually like why

is this happening and then what does

this mean as a Tesla shareholder okay so

first things first why is this happening

I really hate to say it but I think a

lot of

this can be spawned by elon's attitude

towards The

Regulators now not we all know every

person isn't perfect everybody makes

mistakes and Regulators realize that

like hey you screw up as you know a

publicly listed company or whatever uh

you know you might have to pay a fine uh

and issue corrective action and come up

with a plan so that you don't screw up

again in the future just to go like

extreme with this right look at

basically the audit sham Mill BF borgers

they uh were just shut down by the SEC

uh that was the company the Trump spack

hired but they didn't actually do any

work for the Trump spack yet uh but this

audit Mill at least the allegation goes

basically just took old Audits and

changed dates and passed them off as new

ones they're doing like three to four

audits per employed person or or three

to four x the number of audits per

employed person that other audit firms

were doing leading to a lot of

suspicions that they weren't actually

auditing that they were kind of just

falsifying documents and you know

checking off boxes that weren't supposed

to be checked that company got

finded 10 million bucks and the CEO got

fin $2 million now obviously those are

big numbers but for a corporation it's

like okay that's probably and again we

have to say probably and allegedly a

blatant fraud and that was their fine

now they're not the size and magnitude

of Tesla but those are the sorts of

frauds that the SEC is trying to shut

down you know if if you had a goal and

uh you screwed up on your goal and you

made it really clear like hey look

here's what the goal is with FSD here's

we are now where we are now here's what

has to happen to get to this goal and

you fall short maybe that's not that big

of a deal maybe that's the

entrepreneurial Spirit and the SEC I

don't think would really go go after

Tesla for that I think what's more is

that it almost sometimes feels like Elon

Musk is purposefully trying to spite The

Regulators and then The Regulators are

then sort of dare I say looking for all

right well we could play that game too

and the best comparison I can give you

is or uh example I should say I could

give you is when Elon Musk said Hey look

I'll meet you SEC and we'll do our

deposition together I'll come to your

office and I'll do a meeting this was

late last year two days before he

cancels going to visit the

SEC Weeks Later goes completely dark on

the

SEC SEC suggests hey can you come visit

us at any of these offices around the

country can we get this done we'll

accommodate you anywhere let's get this

done it basically got to the point of a

court having to compel Elon Musk to

testify or or to provide you know

whatever information or to the interview

that the SEC wanted and I think it's

that sort of blatant spiting of uh

Regulators that has Regulators going hm

okay well if you're going to spite us is

it because maybe you're trying to hide

something and let's go investigate this

a little bit and then what do they do

they subpoena employees or how about all

the employees that just got fired it's

not that hard for them to subpoena a

bunch of employees who just got fired

and put together some kind of basically

you know thorough thoroughly exemplified

complaint with the in conjunction with

the Department of Justice where they're

basically able to go here's what Elon

Musk said to investors 4680 you know

that's the future I mean we should look

it up battery day Tesla right so battery

day Tesla was September

2020 and that was the annual meeting of

stock uh share holders basically uh and

uh battery day and they put together

this gorgeous uh uh battery Day

presentation this was it uh and uh you

know we got a little bit of enthusiasm

and excitement but about you know future

product lines and future features I

remember covering this it was really

really exciting uh this was so fun

everybody was so excited about what

Tesla was up to uh and so this is where

they gave this basically demonstration

of how amazing uh they've come up with

the technology to create this evolution

in a product but here they're pitching

50 plus% energy density now some of that

obviously will be because of volume

because it's obviously a larger battery

it's kind of like a AAA Battery to a

doublea battery this is the way I like

to look at it uh but some of these

promises the SEC will probably go to and

look at and say okay so here's a you

know 468 8 cell 16 plus% range 5x the

energy uh 14% uh uh cost per kilowatt

reduction where is that now and we're

going to get to introducing this into

every single uh vehicle uh that Tesla

creates and the goal is that by 2022

we're going to have 100 gwatt hours and

3 terawatt hours of battery production

uh by 2030 well mind you we're in

2024 and we're nowhere near maybe even

10% of 4680 capacity right now because

the only thing we're making these for

are cyber trucks so if the only thing

we're making these for are cyber trucks

uh let's see kilowatt hours cyber truck

let's see the current is 123 kilowatt

hours right kilowatt hours so we're

going to create let's go uh we'll call

this 123k dubs let's say 10,000 have

been created then we really have 1 2

million uh kilowatts 1.2 million

kilowatts okay well what is 100 gaws

here you go 100 gwatt hours is actually

oh boy what do we have here that looks

like 100 million kilowatt hours so we're

supposed to be at 100 million kilowatt

hours for the new batteries by 2022 so 2

years ago and cybertruck is maybe 1/

100th of that

so unfortunately there are going to be a

lot of opportunities for and this this

is just one example right Dojo being a

hedge 4680 being the nonpreferred

battery now the $25,000 car the Roadster

they've taken deposits for but I I don't

think it's anywhere near on a sort of

promises that the SEC is going to look

at in writing and go is this just a

pattern of Elon Musk creating

expectations that end up falling through

blomberg Intel actually did a pretty

good piece breaking down why the 4680

just isn't as efficient as expected and

so while this was really cool hope and

theoretical science it just didn't end

up working out the way Tesla expected

the problem with this is investors are

sold these

visions and then they don't necessarily

come true so what does that mean as an

investor is Tesla bad investment well

that's separate see I still think that

Tesla has a phenomenal upside in not

just FSD licensing but primarily just

selling cars at a high margin that's

still the biggest way that I underwrite

Teslas and I personally think you can

almost collapse the value of FSD into

the value of the car and for probably at

least the next 5 to 10 years you've

really got a vehicle that you can't

compete against see in the longer term I

don't think people will actually buy a

car because it has full self-driving in

it I think every car will have full

self-driving in it so it kind of go back

to buying a car because it's a car and

it'll just come with a full self-driving

stack inside of it so manufacturing

Teslas and making Tesla's ubiquitous is

always going to be what's very very

important to Tesla other companies will

solve full self-driving as well so as a

long-term investor for Tesla uh although

I do fundamentally trade it to take

advantage of tax scenarios which I think

everybody should but that's on them uh

it's not personalized advice obviously

it's broad broad suggest question I

think

that this investigation in Tesla is not

necessarily A Bad Thing uh but it's

certainly not a good thing like we know

it's not good uh and I wouldn't say it's

something that says you know run for you

know Run for the hills or whatever to

get out of Tesla because the SEC and the

doj may end up putting together some

form of fraud complaint against Tesla I

can already see the headline Tesla

charged with massive fraud over seven

years or what ever due to elon's

promises and then what they do is they

put together a list of here all the

claims here are the employees on the

inside on record going yeah that's

yeah that's yeah

that's that's uh and

then here are the new promises from Elon

what do we expect is that pattern is

what they'll establish and that's going

to look really bad now do I really think

that uh whatever punishment could

potentially come out of a criminal

complaint uh which could end up just

being like paying back money to

sharehold holders or or uh you know some

form of fines or a combination of that

do I really think that is a what you

want to plan for no of course not

because it it'll probably damage the

company and the stock a lot more uh but

do I think that that happening is enough

to say oh Tesla's a Bad Company should

invest in Tesla no not at all absolutely

not but I do think that elon's behavior

against Regulators has unfortunately

attracted this negative attention

generally I'm of the mindset where uh I

i' you know love to be able to be as as

uh as as Cooperative as possible to say

Hey you know if if let's say the SEC

says Hey Kevin you know we have a

problem with this how can we fix it and

so there are always going to be cases

where you're going to have to pay fines

uh for things that just aren't perfect

as they should

be but I think you enhance or worsen

that when you purposefully try to spite

The Regulators and then you kind of give

them the

ammunition to come after you so I think

a little bit this is um unfortunately

Elon soaking regulatory attention to him

when he shouldn't be soaking and and I'm

not talking about the Mormon soaking

either this is like maybe we should use

the word magnet magnetically attracting

this sort of negative attention I think

uh trying to be a little bit more um how

should I say uh Cooperative might go a

long way anyway who knows this is just

my thought my speculation a lot of folks

were asking me about this so here it is

do I really think a wire charge at the

end of the day is going to be a big deal

again doesn't look good it'll take years

to actually litigate the point

is I think uh I think this is a very

similar to a get Trump uh situation

unfortunately can not advertise these

things that you told us here I feel like

nobody else knows about this we'll we'll

try a little advertising and see how it

goes congratulations man you have done

so much people love you people look up

to you Kevin P there financial analyst

and YouTuber meet Kevin always great to

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