The lawsuit brought against Tesla CEO Elon Musk by the U.S. Securities and Exchange Commission (SEC) has been settled over the weekend, with Musk being removed as Chairman of the Board at Tesla for a period not less than three years.
Other “muzzles” applied to the serial entrepreneur include the addition of two independent directors to the board, and the latter setting up a permanent monitoring committee to oversee any communication between Musk and the public on Twitter and other social channels. The SEC has effectively clamped down on Musk’s ability to say anything publicly without it going through “mandatory procedures and controls.”
Will this affect the company’s day to day operations or strategic direction? No, it is not likely to have any impact on the status quo other than the fact that any statement by Musk will be internally policed, and the process itself monitored closely by the SEC. The changes to the board’s structure could impact the internal decision-making process, but the board has always supported Musk even though it was often blind-sided by his candid use of Twitter as his communications platform of choice.
Some might feel that the entrepreneur is being let off lightly, with no massive fine or probationary period being part of the settlement. However, the SEC sees it differently, with the regulatory body’s chairman, Jay Clayton, stating that punitive action needs to be balanced against “the skills and support of certain individuals” that could be crucial “to the future success of a company.”
Now that the “funding secured” fiasco that was born and died in August has finally been buried, the company and its helmsman can move forward to the challenges awaiting them in Q4 2018.
With Model 3 production numbers for Q3 coming in at a reported 53,000 cars and delivery numbers being given several legs-up during September to bring it as close to production levels as possible, the bar is now set even higher for the final quarter of 2018.
Per our own estimates, as long as Panasonic and Tesla can adequately address the battery bottleneck in the next month or so, the company has a fair shot at hitting 80,000 Model 3 cars produced for the fourth quarter of 2018.