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Federal prosecutors investigate Tesla performance claims

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The Wall Street Journal reported Wednesday that federal prosecutors are looking into Tesla’s (NASDAQ:TSLA) vehicle performance claims following a July story by Reuters outlining the electric automaker’s scheme to exaggerate the potential driving distance of its vehicles.

Reuters previously reported that Tesla vehicles frequently fall short of reaching the range expectations and forecasts that are promoted by the cars’ own built-in systems. According to sources cited by Reuters, approximately ten years ago, the company developed algorithms to generate overly optimistic driving range estimates displayed on the dashboard. Additionally, it’s reported that Tesla established a “Diversion Team” to handle and potentially cancel service appointments related to range concerns.

The EV giant created the team following an overwhelming number of appointments at its service centers. These appointments were made by owners who had expected better performance based on company promotions, estimations and the projections shown on the cars’ in-dash range indicators.

It has also been reported by the WSJ Wednesday that the U.S. Attorney’s office in Manhattan is currently looking into Tesla’s allocation of company finances for a confidential project described internally as a “glass house” for CEO Elon Musk. The report, however, did not reveal any specific dollar figures regarding the investigation pertaining to the project. As per the WSJ, this house is situated close to Austin, Texas.

The WSJ reported in July that Tesla board members had investigated to see if company resources were misused on the project.

Shares of TSLA are down 0.39% in pre-market trading Thursday.

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