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Autonomous Vehicles

Former Workers at Tesla Helped Lawyers Craft Shareholder Suit

It’s not common for a shareholder class-action lawsuit, typically filed after a stock’s value has fallen precipitously, to get buzz among reporters. But this one against Tesla and its CEO Elon Musk seems unique: No fewer than 11 former workers at Tesla, including an ex-director of manufacturing at the company’s main car-production plant, provided information to the plaintiffs’ lawyers who filed the suit, according to an amended filing from March 23. It alleges Musk knowingly made false statements to investors that Tesla would be able to make 5,000 Model 3 sedans per week by the end of 2017, despite being told by his subordinates that that would never happen and continued to do so in the face of mounting evidence. Tesla’s stock dropped in price by 20% between May 2017 and November of that year, after it became clear that production target would not be met—not by a long shot. Five months later, the production pace is about 2,000 per week, Tesla has said. A spokesman for the company didn’t immediately respond to a request for comment about the suit, which is worth reading. We’ll be watching it with interest.

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