Elon Musk steps down as Tesla Chairman after Controversial Tweet

Elon Musk steps down as Tesla Chairman after Controversial Tweet

Elon Musk steps down as Tesla Chairman after Controversial Tweet

According to the SEC, Musk has agreed to not only relinquish his position, but will also pay a hefty $20 million fine (in which the company also has to pay an equivalent amount). Under terms of the settlement, Musk can remain CEO but must relinquish his role as chairman.

Musk said in an email to employees on Saturday the company was "very close to achieving profitability" but for that it has to stabilize a brutal ramp-up in output whose targets it has consistently struggled to meet.

The electric-car maker met Wall Street expectations for production and deliveries of its Model 3 sedan. Musk has told upset customers that "we've gone from production hell to delivery logistics hell", and the CEO has incomprehensibly suggested the solution is for Tesla to build its own auto carriers, despite no evidence of any shortage of vehicle haulage capacity.

Tesla stock rose 17.3 per cent to $US310.70 after a 14 per cent plunge on Friday. Following the tweet, Tesla's stock jumped 6 percent leading to intervention by the SEC.

In the Chicago suburb of Highland Park, more than 75 people crammed into Tesla's service center and another 50 or so waited outside. That also makes the Model 3 by far the bestselling electric auto in the USA, outselling the Nissan Leaf and the Chevy Bolt EV by more than 10-to-1.

Lawyers said that the settlement and size of the fine might give more ammunition to short-sellers pursuing separate cases against Musk for manipulating the company's shares through the August 7 tweet, as well as to an investigation by the US Justice Department.

Others were so busy that volunteers showed up to help staff out.

"This weekend is the pivot point", he said, describing it as watershed moment not just for the company but for the shift away from the internal combustion engine. At the moment however, Tesla has yet to name a new chairman.

The settlement marked a swift end to the SEC's lawsuit, which was filed Thursday.

The electric auto maker is expected to report third-quarter production numbers on Tuesday, following a period of turbulence, including a run-in with securities regulators that culminated in Musk being ousted as Tesla's chairman and hit with a multimillion-dollar fine. "The total package of remedies and relief announced today are specifically created to address the misconduct at issue by strengthening Tesla's corporate governance and oversight in order to protect investors", Stephanie Avakian, Co-Director of the SEC's Enforcement Division.

Related news