Tesla received a subpoena from the U.S. Securities and Exchange Commission (SEC) on November 16, 2021 related to a settlement that required CEO Elon Musk's tweets on material information about the company to be vetted. The subpoena came 10 days after Musk asked his Twitter followers if he should sell 10% of his stake in the company, which triggered an immediate selloff of the stock.
The SEC's latest action is just another item on the list of issues that have recently faced Tesla. Tesla is also under pressure from federal auto safety regulators regarding vehicle recalls and investigations related to its driver-assistance software. In 2018, Musk agreed to have the company's lawyers pre-approve tweets with material information about the company after he settled a lawsuit by the SEC over his tweet on taking the company private. In 2021, Reuters reported that the SEC had opened an investigation into a complaint by a whistleblower that Tesla failed to properly notify its shareholders and the public of fire risks associated with solar panel system defects over several years. And Tesla has been battling a series of lawsuits on racial abuse and sexual harassment. A federal jury in October ordered the company to pay $137 million to a Black former contract worker in one of the cases.
Tesla, for its part, said it "routinely" cooperates with government subpoenas and other investigations and inquiries. And Tesla has its own complaints to levy as well. The company and the Biden administration have been at odds in the past few months over the administration focusing on legacy automakers like Ford and GM in the electric vehicle race rather than on Tesla. In January, the CEOs of Ford and GM attended a meeting of tech and auto companies hosted by President Biden. Musk, the CEO of the largest electric vehicle manufacturer not just in the U.S. but globally, was not invited. In the first half of 2021, Tesla sold close to 421,000 electric vehicles, which made up nearly 15% of the global total and placed it well ahead of its nearest competitor, Volkswagen Group.
Musk has used his Twitter account to attack the Biden administration for allegedly ignoring Tesla and holding up Detroit automakers as leaders in the electric vehicle transition. Musk called Biden a “damp sock puppet” in a tweet last month.