Tesla Faces Potential Fraud Probe by the DOJ. Here's Why
The Justice Department is investigating Tesla for potential securities and wire fraud, according to media reports.


The Department of Justice (DOJ) is investigating Tesla (TSLA) to determine if it committed securities or wire fraud by misleading consumers about its Autopilot self-driving technology, people familiar with the matter told Reuters.
Tesla's Autopilot and Full Self-Drive (FSD) systems for its electric vehicles (EVs) are not fully autonomous. While Tesla says drivers "must be in control of your vehicle, pay attention to its surroundings and be ready to take immediate action including braking," the DOJ is examining other statements made by the company and its CEO, Elon Musk, which may have suggested that the cars can drive themselves.
One example Reuters gives is a video on Tesla's website shows a car using its Autopilot technology and states, "The person in the driver's seat is only there for legal reasons. He is not doing anything. The car is driving itself."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"The probe, which is not evidence of wrongdoing, could result in criminal charges, civil sanctions, or no action," Reuters said. "Prosecutors are far from deciding how to proceed, one of the sources said, in part because they are sifting through voluminous documents Tesla provided in response to subpoenas."
This is hardly the first investigation into Tesla's Autopilot system. In April, the National Highway of Traffic Safety Administration (NHTSA) said it is looking into the company's late-2023 recall of more than 2 million vehicles that include the Basic Autopilot package.
Additionally, the Securities and Exchange Commission (SEC) is investigating the representations of Tesla's self-driving capabilities to investors, a source told Reuters. Both the DOJ and SEC declined to comment on the report.
Is Tesla stock a buy, sell or hold?
Wednesday's headlines have Tesla shares trading down more than 2% in intraday action, making it the worst Magnificent 7 stock so far. Longer term, the stock is down 30% for the year to date, pushing most analysts to the sidelines.
According to S&P Global Market Intelligence, the consensus analyst target price for Tesla stock is $181.73, representing implied upside of about 4% to current levels. Meanwhile, the consensus recommendation is a Hold.
Still, Wedbush analyst Daniel Ives has a Buy rating and $275 price target on Tesla, representing implied upside of more than 57% to current levels.
Ives recently called Tesla's approval for FSD in China "a key moment for Musk as well as Beijing at a time that Tesla has faced massive domestic EV competition in China along with softer demand." The analyst added that while "the long-term valuation story at Tesla hinges on FSD and autonomous, a key missing piece in that puzzle is Tesla making FSD available in China which is now a done deal."
Related Content
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
-
Choose a Beneficiary for Your Estate Plan: It's Not 'Duck, Duck, Goose'
Choosing a beneficiary for your 401(k), insurance policy or similar assets is crucial for estate planning. Here is how to do it, and six pitfalls to avoid.
-
T-Mobile's Free iPhone 17 Deal: A Smart Switch or a Hidden Catch?
Receive a free iPhone 17 when you switch to T-Mobile. We'll explain whether the deal is worth it.
-
How an Expired Passport Thwarted Blackmail (and What Other Important Documents You Should Keep)
An optometrist produced his expired passport to foil a blackmail attempt by the daughter of a former employee. After proving he was out of the country on the date of a forged diary entry, he took it a step further.
-
Optimize, Grow, Retain: The Power of Annual Client Reviews
Financial advisers can use annual reviews to help enhance client outcomes, strengthen relationships and build their practice.
-
I'm a Real Estate Investing Pro: This Is What Investors Should Know About Truck Stop Investments
Truck stops might seem like good investments, but they can actually be a risky gamble due to unstable fuel prices, unreliable operators and coming changes in transportation. Instead, consider safer options like industrial or residential properties.
-
How Digital Platforms Are Changing the Way You Invest in Gold
Investing in gold is easier than ever thanks to digital platforms. Learn how online tools are lowering costs, increasing transparency and making gold accessible to all investors.
-
Stocks Rise to Start Fed Week: Stock Market Today
The Nasdaq Composite and S&P 500 hit new record closing highs as Wall Street awaits the Fed's next rate cut.
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary Forms
Standard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
This Is How Life Insurance Can Fund Your Dreams Now
Beyond a death benefit, life insurance can provide significant financial value and flexibility through 'living benefits' while you are still alive, helping with expenses like education, business ventures or retirement.
-
Potential Trouble for Retirees: A Wealth Adviser's Guide to the OBBB's Impact on Retirement
While some provisions might help, others could push you into a higher tax bracket and raise your costs. Be strategic about Roth conversions, charitable donations, estate tax plans and health care expenditures.