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Tesla shareholder sues company over 2018 SEC consent decree

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Tesla was sued by a shareholder last Friday after accusing the company’s board members of breaching their fiduciary duties in connection with the automaker’s 2018 consent decree with the SEC.

Tesla said in a 10-Q filing with the SEC on Monday that a shareholder filed the suit on October 21, alleging the company of breaching its duties after the 2018 settlement, which dealt with CEO Elon Musk’s Tweet that he was prepared to take the company private at $420 per share. “Funding secured,” Musk infamously said.

Tesla said in the filing:

“On October 21, 2022, a lawsuit was filed in the Delaware Court of Chancery by a purported shareholder of Tesla alleging, among other things, that board members breached their fiduciary duties in connection with their oversight of the Company’s 2018 settlement with the SEC, as amended. Among other things, the plaintiff seeks reforms to the Company’s corporate governance and internal procedures, unspecified damages, and attorneys’ fees.”

The company said it believes the claims have no merit, and they intend to defend against them “vigorously.”

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In 2018, Musk stated on Twitter that he was planning to take Tesla shares private, which ultimately resulted in the SEC bringing securities fraud charges against the CEO. Tesla, Musk, and the SEC agreed to the following terms in 2018:

  • Musk will step down as Tesla’s Chairman and be replaced by an independent Chairman.  Musk will be ineligible to be re-elected Chairman for three years;
  • Tesla will appoint a total of two new independent directors to its board;
  • Tesla will establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk’s communications;
  • Musk and Tesla will each pay a separate $20 million penalty.  The $40 million in penalties will be distributed to harmed investors under a court-approved process.

However, Musk has pushed to have the decree thrown out this year. Aiming to remove the “muzzle” the decree has effectively placed on Musk, his attorneys argue the SEC’s overwatch of his actions has become more invasive. Musk attorneys, including Alex Spiro, stated, “Under the shadow of the consent decree, the SEC has increasingly surveilled, policed, and attempted to curb Mr. Musk’s protected speech that does not touch upon the federal securities laws. Any objective served by the pre-approval provision has been served.”

The SEC announced in early June it had established the Tesla Fair Fund, which aims to pay investors who were negatively affected by Musk’s “funding secured” Tweet.

Tesla was also sued by JPMorgan and other shareholders in relation to the Tweet.

I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

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Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

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Tesla Semi gets new adoptee in latest sighting

Tesla is continuing to increase the number of companies that have access to the Semi.

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Credit: Tesla

The Tesla Semi looks to have its newest adoptee as US Foods, the second-largest foodservice distributor in the United States, was seen with its badging on the all-electric Class 8 truck.

US Foods trails only Sysco Corporation in terms of foodservice distributors by volume in the United States. The company joined several other massive food industry entities, such as PepsiCo, and its subsidiary, Frito-Lay, have both utilized the Tesla Semi in their fleets.

Tesla Semi futuristic sci-fi acceleration sound will never get old

The Semi in question was spotted by X user Zanegler, a prominent tracker of the Tesla Semi and its factory, which sits near the company’s Gigafactory Nevada plant in Reno:

US Foods also has a distribution center in Reno, which could have something to do with its decision to start using the Semi in regional logistics.

With an influx of EV semitrucks hitting the market from many different manufacturers, it is evident that companies are taking the idea of making their fleets more environmentally friendly very seriously.

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Tesla is still very close to unloading the Semi in a more volumized fashion, as the company’s Vice President of Vehicle Engineering, Lars Moravy, said in January:

“We just closed out the Semi factory roofing walls last week in Reno…but we’re prepping for mechanical installation of all the equipment in the coming months… The first builds of the high-volume Semi design come late this year in 2025 and begin ramping early in 2026.”

First Tesla Semi high-volume production builds expected this 2025

With the latest addition of US Foods, Tesla increases its list of companies that are planning or are already using the Semi to help with local logistics and transportation. Among them are:

  • PepsiCo
  • Walmart
  • Sysco
  • Costco
  • Martin Brower
  • Saia Inc.
  • UPS
  • Anheuser-Busch
  • DHL

Many other companies have plans to use the Semi in their fleets. Currently, Tesla appears to be hand-picking those who have access to the vehicle as the pilot program continues.

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Tesla Cybertruck takes a bump from epic failing Dodge Charger

The Cybertruck seemed unharmed by the charging Charger.

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Credit: Hammer_of_something/Reddit

There comes a time in a driver’s life when one is faced with one’s limitations. For the driver of a Dodge Charger, this time came when he lost control and crashed into a Tesla Cybertruck–an absolute epic fail. 

A video of the rather unfortunate incident was shared on the r/TeslaLounge subreddit.

Charging Charger Fails

As could be seen in the video, which was posted on the subreddit by Model Y owner u/Hammer_of_something, a group of teens in a Dodge Charger decided to do some burnouts at a Tesla Supercharger. Unfortunately, the driver of the Charger failed in his burnout or donut attempt, resulting in the mopar sedan going over a curb and bumping a charging Cybertruck.

Ironically, the Dodge Charger seemed to have been parked at a Supercharger stall before its driver decided to perform the failed stunt. This suggests that the vehicle was likely ICE-ing a charging stall before it had its epic fail moment. Amusingly enough, the subreddit member noted that the Cybertruck did not seem like it took any damage at all despite its bump. The Charger, however, seemed like it ran into some trouble after crashing into the truck.

Alleged Aftermath

As per the the r/TeslaLounge subreddit member, the Cybertruck owner came rushing out to his vehicle after the Dodge Charger crashed into it. The Model Y owner then sent over the full video of the incident, which clearly showed the Charger attempting a burnout, failing, and bumping into the Cybertruck. The Cybertruck owner likely appreciated the video, in part because it showed the driver of the Dodge Charger absolutely freaking out after the incident.

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The Cybertruck is not an impregnable vehicle, but it can take bumps pretty well thanks to its thick stainless steel body. Based on this video, it appears that the Cybertruck can even take bumps from a charging Charger, all while chilling and charging at a Supercharger. As for the teens in the Dodge, they likely had to provide a long explanation to authorities after the incident, since the cops were called to the location.

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Tesla confronts Service complaints with new AI-backed strategy

Tesla will use a new AI Agent to help expedite Service claims and improve communication with customers.

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tesla service
Credit: Tesla

Tesla is implementing a new AI-based strategy to improve service for owners. Service has routinely been among the biggest complaints of owners, although it has improved drastically over the past few years.

Some of the complaints that Tesla has received regarding its Service platform have evidently been used to develop new strategies to not only streamline the entire experience but also to make things easier for the company, which deals with many claims each week.

As a result of complaints in the past, Tesla has used various strategies to make things better for customers. However, the latest improvement comes as a result of AI, something Tesla leans on in many facets of its business.

Tesla adds ingenious solution to app to streamline Service appointments

Tesla’s AI and IT Infrastructure, Cybersecurity, and Vehicle Service head Raj Jegannathan said on X this week that the company is rolling out a new AI Agent specifically designed to handle service comms with customers.

He said the new Service AI Agent will detect delays in communications between the company and the customers, monitor the sentiment of these conversations, and auto-escalate certain claims directly to leaders.

It will also allow customers to type the word ‘Escalate’ in the message center portion of the phone app after two weeks of delays. This will help customers reach higher-ups more easily and likely will eliminate the complaints that many have had over the past few years.

The company is rolling out the AI Agent in ten pilot locations to start. Its first day being active was May 8.

Jegannathan said:

“Tesla Service’s new AI Agent detects comms delays, monitors sentiment, & auto-escalates to leaders. Starts tomorrow at 10 pilot locations. In 2 weeks, type “Escalate” in ‘message center’ to reach managers. Guardrails in place to prevent abuse. We’ll keep improving!”

Service has had a lot of interesting strategies used to improve things, but it has definitely been a weak point of the Tesla ownership experience. In a perfect world, vehicles wouldn’t need repair for anything, but that is not realistic.

Instead, Tesla has worked to expedite the entire Service experience through various strategies, including F1-style service, and a goal to fix two-thirds of repair claims within the same day.

Parts availability sometimes takes this goal out of reasonableness, but these constant attempts at improving the repair experience show Tesla is doing what it can to make things better for owners.

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