It was known as "Project 42."
Back in August, the Wall Street Journal reported that federal prosecutors were investigating Tesla's (TSLA) -) use of company funds on a secret project that had been described internally as a house for Chief Executive Elon Musk.
Related: Why Tesla stock is crumbling — and where it could go next
Tesla board members had investigated whether company resources were misused on the secret effort, known internally as “Project 42,” and whether Musk was personally involved.
The U.S. Attorney’s Office for the Southern District of New York was seeking information about personal benefits paid to Musk, how much Tesla spent on the project—which called for a spacious glass structure to be built in the Austin, Texas, area—and what it was for, the Journal reported, citing people familiar with the matter.
The Securities and Exchange Commission is also investigating the matter.
Musk has insisted that no such house exists.
"I’m not building a house of any kind, let alone a glass one," Musk posted on X, the social media platform he purchased last year. "I’m not building a house anywhere."
Requests for 'vehicle range and personnel decisions'
The issue of federal investigations surfaced in the company's recent third-quarter earnings report.
In a filing with the SEC, Tesla has received requests for information, including subpoenas, from the U.S. Department of Justice that have have included requests for documents related to the company's Autopilot and FSD, or "Full Self-Driving" features.
The California Attorney General, the National Highway Traffic Safety Administration, the DOJ and the SEC are all actively investigating the company over self-driving safety concerns.
Although the company uses the term “full self-drive,” the driver has to be ready to take over if necessary, as the self-driving software is still far from being safe and reliable.
"Additionally, the Company has received requests for information, including subpoenas from the DOJ, regarding certain matters associated with personal benefits, related parties, vehicle range and personnel decisions," the filing said.
Tesla allegedly rigged the dashboard readouts in its electric cars to provide “rosy” projections of how far owners can drive before needing to recharge, according to Reuters.
The automaker last year became so inundated with driving-range complaints that it created a special team to cancel owners’ service appointments.
"To our knowledge no government agency in any ongoing investigation has concluded that any wrongdoing occurred," Tesla said.
The third quarter was a tough time for Tesla.
'Dug our graves' with Cybertruck
The company missed Wall Street's third-quarter earnings, reporting adjusted earnings of 66 cents per share, far short of analysts' estimates of 73 cents.
Tesla also reported third-quarter deliveries of around 435,000 vehicles, missing Wall Street expectations of 455,000 deliveries. The company did, however, reaffirm its intentions to deliver 1.8 million vehicles for the year.
Wedbush's Dan Ives, who slashed his Tesla price target to $310 from $350, said he would characterize the analysts' conference call as a "mini disaster," noting that while the Street wanted to "get their arms around the falling margins/constant price cuts," they instead "heard a much more cautious Musk."
Meanwhile, a Tesla Cybertruck was spotted in the parking lot at Formula 1 Lenovo U.S. Grand Prix in Austin on Oct. 22. The first deliveries of the long-awaited truck are expected to begin in November.
Musk said the conference call with analysts that "we dug our own grave" with the Cybertruck, according to a transcript of the call, but added that it is "our best product ever."
"Cybertruck's one of those special products that comes along only once in a long while," Musk said. "And special products that come along once in a long while are just incredibly difficult to bring to market to reach volume, to be prosperous."
Get investment guidance from trusted portfolio managers without the management fees. Sign up for Action Alerts PLUS now.
