Musk tells Tesla securities fraud jury he has ‘no trouble’ raising money

Tesla chief executive Elon Musk has no problem raising money, a jury in a securities fraud trial in San Francisco heard.

In his third day on the witness stand, Musk was defending the legitimacy of his assertion in an August 2018 tweet that he had “funding secured for the take-private transaction.

“Every financing round I’ve had has been oversubscribed,” he testified Tuesday in response to friendly questions from his own lawyer. “It’s not a problem for me to raise money. I’ve done a good job for investors and if you do a good job, they give you money.”

Mr Musk spent most of his approximately four hours on the stand the previous day facing off with a lawyer for investors who claim the billionaire’s Twitter posts in August 2018 were misleading — and caused shareholders who made bets on his tweets to suffer big losses.

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While investor attorney Nicholas Porritt was trying to show that the short-lived take-private proposal was empty, lacking the most fundamental details, Mr Musk told jurors he was certain about the funding. He testified about the possibility of using his holdings in SpaceX to help finance the transaction, along with a multibillion-dollar commitment by Saudi Arabia’s sovereign wealth fund.

Mr Musk also said that his actual language in the tweet on August 7th, 2018 — “Considering taking Tesla private — was not the same as saying “the deal will be done.

He said Tuesday the aim in his tweets was to be transparent and “do the right thing with Tesla shareholders.

“I’m making it very clear that either scenario is possible,” he said. “We may go private or we may not.”

Mr Musk testified that Dan Dees, a Goldman Sachs Group executive who he’d been talking to about the take-private plan, was very complimentary about how Mr Musk explained his rationale in a Tesla blog post on the same day as his tweet.

Mr Musk told jurors that Tesla’s relationship with JPMorgan Chase & Co had gone south.

He testified that he “withdrew all commercial banking business from JPMorgan, which to say the least made JPMorgan hate Tesla and me”.

Mr Musk generally performed stronger as a witness Tuesday than he did Monday, when he confessed in court that he’d gotten a poor night’s sleep and complained in his fourth hour on the stand that he was suffering from back pain.

Mr Porritt wasn’t able to land as many blows to Musk’s narrative in the final hour of the CEO’s testimony Tuesday before he was excused.

But Mr Porritt did get Musk to grudgingly acknowledge that he never got commitments for specific funding amounts for the Tesla take-private transaction from the Saudi fund — or any bank or person.

“Not a specific number,” Mr Musk said. He’d previously testified he believed the Public Investment Fund’s support was “unequivocal, and added Tuesday that “PIF can take Tesla private 150 times over”.

Mr Musk was also confronted over his failure to mention the possibility of tapping into SpaceX shares when he submitted a written explanation to the court in 2021 about the state-of-play for financing the take-private deal in 2018. Musk said Tuesday that he’d mentioned SpaceX to the Securities and Exchange Commission in its 2018 probe of the tweets, but forgot to bring it up in the current case before Monday.

“It was an error on my part in not mentioning it here,” he said.

Later, Tesla’s head of investor relations, Martin Viecha, testified that Mr Musk’s tweets triggered a barrage of queries to him about whether “this a real event or is this made up”. He said that before the tweets came out, he had no experience with privatisation in his previous work as a side-sell analyst.

Mr Viecha said he told many investors the take-private plan was indeed a “firm offer”, but didn’t clear that language with Tesla’s chief financial officer or others at the company.

“It was my understanding that Saudi PIF would be taking over the company,” Mr Viecha testified. “I don’t actually know if there was a commitment letter or if there was a verbal agreement.”

Separately, Tesla said on Tuesday it would invest more than $3.6 billion to expand its Nevada Gigafactory complex with two new factories, one to mass produce its long-delayed Semi electric truck and the other to make its new 4680 battery cell.

The cell plant would be able to make enough batteries for 2 million light-duty vehicles annually, including batteries using the 4680-type cell. The 4680 is key to Tesla meeting a goal of halving battery costs and ramping up battery production nearly 100-fold by 2030.

Together, the facilities will employ about 3,000 people, extending the electric vehicle maker’s complex east of Reno, where it runs a battery joint venture with Japan’s Panasonic and makes vehicle parts and power backup systems.

Panasonic currently supplies cells to the gigafactory, and Tesla assembles them into battery packs there.

Tesla has struggled to ramp up production of the 4680 at its factories in Fremont, California, and Austin, Texas.

Experts say the dry-coating technique used to produce the bigger cells in these batteries is new and unproven and the company has been having trouble scaling up manufacturing to the point where the big cost savings kick in.

The move suggests Tesla is finally committing to large-scale production of the Semi, which was initially supposed to begin rolling out of factory doors in 2019. Tesla made the first Semi deliveries in December to PepsiCo but there is no sign of a high rate of output of the model.

Other customers that have ordered Semis include brewer Anheuser-Busch, United Parcel Service and Walmart.

The Semi is a truck for 18-wheel semi-trailer vehicles and has a range of 800km on a single charge with a gross weight of 37 tonnes, including trailer and cargo.

Tesla chair Robyn Denholm said in November that Tesla might produce 100 Semis in 2022, but the company disclosed no figure for the model in its fourth-quarter production report.

The EV maker aimed to produce 50,000 Semis in 2024, Mr Musk said on a post-earnings call in October. - Bloomberg, Reuters