Latest Tesla news: Tesla Model 3 the focus of March 2019 Pwn2Own contest
Hackers to compete for prize money of between $35,000 and $250,000 cracking the Tesla Model 3 at this year's Pwn2Own contest
The Tesla Model 3 will be the target of this year's Pwn2Own hacking contest, with prizes from $35,000 to $250,000 up for grabs. Furthermore, the contestant pulling in the highest number of ‘Master of Pwn Points' for Tesla cracks will also win a Tesla Model 3.
The biggest single prize, $250,000, will be available for any hacker cracking the security of Tesla Gateway, Autopilot or VCSEC (Vehicle Controller Secondary), winning execution rights. VCSEC handles the security and alarm on the Model 3.
Successful attacks on the modem or tuner will attract prizes of $100,000; and an Autopilot denial of service - Autopilot being Tesla's self-driving system - will attract a prize of $50,000. Even the key fobs and ‘phone-as-key' have been put up for the event, with a prize of $100,000 for any able to demonstrate a successful attack.
As an add-on prize, Tesla has also put up $100,000 for any crack that can take control of the Model 3's CAN (Controller Area Network) bus, which forms the backbone of any modern ‘smart' vehicle.
There is also $50,000 up for grabs for cracks that can demonstrate persistence - the ability to maintain root control of the component even after a system reboot.
In addition to the Tesla Model 3, Microsoft is offering $250,000 for any successful Hyper-V client guest-to-host escalation.
Microsoft is increasingly a cloud computing company, and it would be catastrophic for the company were any client to be able to exploit Hyper-V, which underlies Microsoft's cloud computing services, to be able to take full control of the host - and therefore all other clients running under it.
The same goes for VMware and Oracle, which are also putting up their respective virtualisation software for Pwn2Own.
VMware specialises in virtualisation software and has put up VMware ESXi, alongside VMware Workstation as a target, with awards of $150,000 and $70,000 respectively for successful cracks. Oracle VirtualBox will also be there with prize money of $35,000 available - not quite enough to buy a Tesla Model 3 outright.
On top of that, a number of web browsers, Windows Defender Application Guard, Microsoft Outlook and Adobe Reader will also be in the stocks.
And the hacker with the first successful exploit of the event will also win a Tesla Model 3.
Pwn2Own is part of the CanSecWest security conference, which will be held this year on March 20-22 in Vancouver, Canada.
29 November 2018: Tesla cars in China report drivers' movements back to government
Chinese government demands information in real-time from vehicle makers in unprecedented data grab
Tesla electric vehicles in China are reporting their drivers' movements back to the government as President Xi Jinping uses the latest technology to step up surveillance to unprecedented levels.
And it isn't just Tesla reporting driving details back to the Chinese authorities, but more than 200 manufacturers, including all the big global manufacturers.
The car makers say that they are only complying with laws in China, while officials in the country claim that the data isn't used for surveillance or added to people's ‘social credit scores', but merely used to improve public safety, to aid industrial development and help local and national governments to better plan infrastructure.
It could be used not only to undermine foreign carmakers' competitive position, but also for surveillance
That's according to an investigation by Associated Press, although it also points out that the government in no other major market demands the same kind of real-time data collection from Tesla and other vehicle makers.
Indeed, the amount of data demanded by Chinese authorities, AP goes on to point out, goes far beyond that needed to improve safety or better plan infrastructure: "It could be used not only to undermine foreign carmakers' competitive position, but also for surveillance — particularly in China, where there are few protections on personal privacy."
Under President Xi Jinping, China has forged ahead with mass surveillance programmes and enthusiastically embraced big data analytics and artificial intelligence to better anticipate potential dissent - and potential dissenters.
It has even devised a system of ‘social credit' control that confers scores on people's loyalty to the state, and goes as far as to prevent them from being able to buy train and plane tickets if their score is too low. Millions are already effectively being denied the right to travel.
The system makes use of technology and encompasses databases containing citizens' face, voice, fingerprints and even their DNA so that everyone can be definitively identified, and their online and offline activity filed in databases. Mobile devices - and now vehicles - can also track people's movements, backed up by as many as 170 million linked surveillance cameras.
Electronic cash will also enable the state to monitor every purchase people make.
Data from Teslas and other electric cars are transmitted to the Shanghai Electric Vehicle Public Data Collecting, Monitoring and Research Centre, which currently grans data from more than 222,000 vehicles, according to AP.
"Electric vehicles in China transmit data from the car's sensors back to the manufacturer. From there, automakers send at least 61 data points, including location and details about battery and engine function to local centres," claimed AP.
It adds: "Data also flows to a national monitoring centre for new energy vehicles run by the Beijing Institute of Technology, which pulls information from more than 1.1 million vehicles across the country."
And, while the majority of cars aren't currently tracked by the authorities across China, in the Muslim-majority province of Xinjiang the government has ordered drivers to fit tracking devices to their vehicles - a measure that could be rolled-out across the country.
Next page: Elon Musk replaced as chairman and Tesla served with subpoena by the SEC
Latest Tesla news: Tesla Model 3 the focus of March 2019 Pwn2Own contest
Hackers to compete for prize money of between $35,000 and $250,000 cracking the Tesla Model 3 at this year's Pwn2Own contest
8 November 2018: Tesla has announced its plan to replace Elon Musk as company chairman with Telstra chief financial officer (CFO) Robyn Denholm, just days before the deadline set by the Securities and Exchange Commission (SEC).
The appointment of Denholm, who has served on Tesla's board since 2014, was announced by the company last night. Denholm will take over in May 2019 and will serve as chairman on a full-time basis.
Prior to her appointment as CFO of the Australian telecoms giant, Denholm worked at Toyota Australia for seven years and has also worked at Sun Microsystems and Juniper Networks, where she was chief financial and operations officer.
The replacement of Musk as chairman of Tesla was mandated by the terms of a deal with the SEC following an investigation into claims of stock-price manipulation. That investigation was brought after Musk had claimed that he was planning to take the company private, "funding secured".
In addition to appointing an independent chairman to replace the Tesla founder, both Musk and the company were fined $20 million each. Under the terms of the deal, Musk is barred from serving as chairman of the company for three years, although he will continue in his role as CEO.
Musk later claimed that it had been "worth it" in response to a question posed over Twitter. Another element of the deal with the SEC, though, includes adding "controls and procedures to oversee Musk's communications" - which will inevitably make Musk's Twitter feed a whole lot less interesting.
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5 November 2018: Tesla has been issued with a subpoena by the Securities and Exchange Commission (SEC) over "certain projections" it made regarding production forecasts for its Model 3 electric vehicle.
Authorities have been investigating since at least February, with the Wall Street Journal revealing in October that even the FBI is involved. However, Tesla was keen to assert back then that it had not been issued with a subpoena. That, though, has changed over the weekend following the publication of the company's latest quarterly report.
"The SEC has issued subpoenas to Tesla in connection with (a) Mr. Musk's prior statement that he was considering taking Tesla private and (b) certain projections that we made for Model 3 production rates during 2017 and other public statements relating to Model 3 production. The DoJ [Department of Justice] has also asked us to voluntarily provide it with information about each of these matters and is investigating," the company's latest 10Q admits.
However, beyond that the company claims that it has nothing more "material" to disclose.
"To our knowledge no government agency in any ongoing investigation has concluded that any wrongdoing occurred. As is our normal practice, we have been cooperating and will continue to cooperate with government authorities," the report adds. "Should the government decide to pursue an enforcement action, there exists the possibility of a material adverse impact on our business, results of operation, prospects, cash flows, and financial position."
The company is also subject to "various other legal proceedings", the report admits, which will include action taken by short-sellers following Musk's ‘funding secured' Tesla privatisation tweets this summer.
The investigation over the company's production forecasts is centre on company claims made by Musk that Tesla would be making up to 5,000 Model 3s a week by the end of 2017. In the end, it made just 2,700 Model 3s throughout the whole of 2017, and didn't hit the 5,000 unit production target until the end of June 2018 following a colossal corporate effort.
In July 2017, Musk reiterated his belief that the company would achieve his target as he pushed suppliers to ramp-up deliveries in anticipation. However, the Model 3 body shop wasn't even fully functional in September and the company, even at that late stage, was hand-building a number of key parts.
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30 October 2018: Tesla is facing a new investigation, this time by the FBI, over claims that it misled investors by wildly overstating its Model 3 production forecasts.
The FBI is conducting what has been described as a criminal investigation, but the investigation would appear to be at an early stage, with reports suggesting that FBI agents have only just contacted former Tesla employees to interview them. Furthermore, the FBI hasn't yet issued a formal subpoena for information from Tesla, either.
A Tesla spokesman told Associated Press that the company had been transparent about the difficulties it faced increasing production of the Model 3.
He added that the company had cooperated with what he described as a "voluntary request" for documents from the Justice Department earlier this year, but said that the company has received no additional requests from the authorities for a number of months.
The claims over an FBI investigation were made over the weekend by the Wall Street Journal. The investigation is centring on company claims that it would be making up to 5,000 Model 3s a week by the end of 2017. In the end, it made just 2,700 Model 3s throughout the whole of 2017, and didn't hit the 5,000 unit production target until the end of June 2018 following a colossal corporate effort.
The investigation is being run out of the US attorney's office in San Francisco, California, and has intensified following Elon Musk's run-in with the Securities and Exchange Commission (SEC) over his plans to take the company private. This culminated in a $20 million fine for Musk and a $20 million fine for Tesla. [see below and next page for more]
The FBI investigation is based on claims made by Musk in a conference call with analysts in February 2017, in which he explained the company's plans to ramp-up production of the Model 3 throughout 2017. The Model 3 is the vehicle intended to drive Tesla from being a niche, luxury car maker into the mid-range, with annual sales of 500,000 units or more.
In July 2017, Musk reiterated his belief that the company would achieve his target as he pushed suppliers to ramp-up deliveries in anticipation. However, the Model 3 body shop wasn't even fully functional in September and the company, even at that late stage, was hand-building a number of key parts.
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29 October 2018: The $20 million fine from the US stock market regulator, the Securities and Exchange Commission, was "worth it", Elon Musk has claimed.
The Tesla founder and CEO was responding to a question posed by one of his Twitter followers, with the fine coming after an investigation by the SEC into claims made by Musk in August - also made via the medium of Twitter - that he was planning to take the company private, "funding secured".
It quickly transpired that funding was far from secured and Musk was forced to backtrack, claiming that taking the company would take longer than he had anticipated.
Musk declared just an hour after his "worth it" tweet that he was going to take a break from Twitter. However, investors may be concerned over Musk's attitude and the lack of progress so far on a new chairman to rein-in Musk's impulses.
Under the terms of the settlement between Musk, Tesla and the SEC, Tesla needs to appoint an independent chairman by 13 November - just two weeks time - and two new independent directors. Musk may also have to give up his personal Twitter account or stop using it in connection with any corporate purpose.
Musk's "funding secured" tweets were made on 7 August, and claimed that he was planning to take the company private at a price of $420 per share - a premium of just over 20 per cent of the company's stock price (which has since nose-dived) at the time. His tweets implied that the only remaining barrier to the privatisation would be a shareholder vote.
"The SEC's complaint alleged that, in truth, Musk knew that the potential transaction was uncertain and subject to numerous contingencies. Musk had not discussed specific deal terms, including price, with any potential financing partners, and his statements about the possible transaction lacked an adequate basis in fact," the SEC claims.
In the immediate aftermath of the "funding secured" tweet, Tesla stock rose by six per cent. The SEC claims that Musk's actions caused "significant market disruption".
However, when it became clear that funding was far from secured, Tesla's stock priced plunged, and continued to fall throughout most of the quarter - until the company posted an unexpected profit last week.
The SEC investigation and fine isn't the end of the matter, though, with private investors - many of them short sellers burned by Musk's tweets - also suing the company and Musk over the August company privatisation claims.
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25 October 2018: Tesla's stock price has leapt in value by almost 20 per cent as a result of the company posting a surprise profit in its third quarter financials.
The company's stock price rose from under $260 earlier this week, before the stock price rose on speculation that the company could post an unexpected third-quarter profit. At the time of writing, Tesla stock was trading at more than $311 per share.
Musk aside, much of the quarter for the company was dominated by a battle to jack-up production to meet a backlog of orders for its latest car, the Model 3.
Margin growth was caused by gradual cost improvements driven by lowering labour hours per vehicle, reduced cost of raw materials, and various other cost efficiencies
That battle also entailed shifting production from purely rear-wheel drive models to all-wheel drive models. The company claimed that it had produced 5,300 Model 3s in the final week of the quarter.
It also boasted that it had delivered 56,065 Model 3s to customers during the quarter, with the majority of those customers trading up from vehicles costing less than $35,000 - the target price of a future entry level Model 3.
"We have taken a step forward by recently introducing a medium range version that has a 260-mile EPA- [Environmental Protection Agency] estimated range and a starting price of $46,000. Better than expected Model 3 cost reduction is allowing us to bring more affordable options to the market sooner," the company stated in a letter accompanying its results announcement.
In total, the company delivered a further 27,710 Model S and Model X cars to customers, making a total of 83,775 deliveries.
The company expects to continue to increase both production and deliveries, while the gross margin for the Model 3 is expected to remain stable
Furthermore, with the focus on improving output, the company also successfully improved its profit margins, while warning that average revenue per vehicle is set to drop as the company introduces cheaper Model 3 variants, with the target to introduce a long-promised $35,000 model variant soon.
"Margin growth was caused by gradual cost improvements driven by lowering labour hours per vehicle, reduced cost of raw materials, and various other cost efficiencies," the company revealed.
Overall, the company posted automotive revenues of $6.1 billion in the third quarter of 2018, up by 158 per cent compared to the $2.36 billion it posted in the same period last year.
As a result, the company posted a pre-tax profit of $271.3 million, and a net income of $311.5 million - well ahead of expectations.
The quarter had been punctuated by a virtual meltdown of the company's founder and CEO, Elon Musk
More important, perhaps, the company has also greatly improved its cashflow position.
Its consolidated statement of cash flows indicates that the company enjoyed positive cashflow of $739.7 million during the quarter, increasing cash and cash equivalents from $2.78 billion at the beginning of the quarter to $3.52 billion by the end of the quarter.
Furthermore, the company expects cash flow to remain around even for the rest of the year, despite plans to repay $230 million of convertible loans with cash in the fourth quarter.
This should go a long way to alleviate investor and analyst concerns over the company's short- and medium-term future.
In the fourth quarter, the company expects to continue to increase both production and deliveries, while the gross margin for the Model 3 is expected to remain stable "as manufacturing efficiencies and fixed cost absorption offset a slightly lower trim mix and the negative impact of tariffs from Chinese sourced components".
Overall, the company revealed, the impact of tariffs on Chinese imports levied by President Trump would cost the company about $50 million.
The quarter had been punctuated by a virtual meltdown of the company's founder and CEO, Elon Musk, who was accused by the SEC of using Twitter to boost the company's stock price by claiming that he planned to take the company private, "funding secured".
He later backtracked. See below for the whole story as it (and Musk) unravelled.
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Latest Tesla news: Tesla Model 3 the focus of March 2019 Pwn2Own contest
Hackers to compete for prize money of between $35,000 and $250,000 cracking the Tesla Model 3 at this year's Pwn2Own contest
30 September 2018: Elon Musk has agreed to resign as chairman of Tesla and to pay a $20 million fine in order to settle charges of securities fraud.
The settlement, reached on Saturday, comes after Musk initially rejected the charges, claiming that they were "unjustified". However, if found guilty, Musk stood to lose a lot more than $20 million and could have been ousted as CEO of the company.
The charges come after Musk claimed in August via a series of tweets that he was planning to take the electric car maker private, and implied that such a move was imminent, "funding secured". Musk later backtracked, claiming that the process of taking the company private would be too time consuming. It was also revealed that funding was far from secured.
At the same time, Tesla has also settled new charges of "failing to have required disclosure controls and procedures relating to Musk's tweets", and will also pay a penalty of $20 million.
In a statement, the SEC added that the settlements are subject to court approval and that they would also require comprehensive corporate governance and other reforms at Tesla. In addition to appointing an independent chairman, Musk will be ineligible to be re-elected as chairman for three years.
Two new independent directors will be appointed to the board and a new committee of independent directors will be expected to put in place additional controls and procedures to oversee Musk's communications. The $40 million in fines will be distributed to investors who claim to have been financially harmed by Musk's premature communications.
"The total package of remedies and relief announced today are specifically designed to address the misconduct at issue by strengthening Tesla's corporate governance and oversight in order to protect investors," said Stephanie Avakian, co-director of the SEC's Enforcement Division.
Musk's "funding secured" tweets were made on 7 August, and claimed that he was planning to take the company private at a price of $420 per share - a premium of just over 20 per cent of the company's stock price (which has since nose-dived) at the time. His tweets implied that the only remaining barrier to the privatisation would be a shareholder vote.
"The SEC's complaint alleged that, in truth, Musk knew that the potential transaction was uncertain and subject to numerous contingencies. Musk had not discussed specific deal terms, including price, with any potential financing partners, and his statements about the possible transaction lacked an adequate basis in fact," the SEC claims.
In the immediate aftermath of the "funding secured" tweet, Tesla stock rose by six per cent. The SEC claims that Musk's actions caused "significant market disruption".
Furthermore, it adds: "Despite notifying the market in 2013 that it intended to use Musk's Twitter account as a means of announcing material information about Tesla and encouraging investors to review Musk's tweets, Tesla had no disclosure controls or procedures in place to determine whether Musk's tweets contained information required to be disclosed in Tesla's SEC filings. Nor did it have sufficient processes in place to that Musk's tweets were accurate or complete."
As such, the company was also implicated in Musk's actions.
The settlement with the SEC won't be the end of the matter, though, as Musk is also facing a series of class action lawsuits relating to the tweets. In addition, he will also have to defend a defamation action for describing the British pot-holer who was instrumental in the rescue of a Thai boys football team from a cave in July as a "paedo".
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28 September 2018: Tesla CEO Elon Musk has been charged with securities fraud by the SEC over "false and misleading tweets" that caused "significant market disruption".
The tweets, at the beginning of August, implied that Musk was planning to take the company private at a price of $420 per share, significantly higher than the company's stock price at the time. He also added that he had "funding secured".
However, when it became clear that such a proposal was far from imminent, the Securities and Exchange Commission (SEC) launched an investigation into what many claimed was a clumsy attempt at share price manipulation at a time when the company's stock was under attack from short sellers.
Elon Musk will be out as CEO of Tesla. At that point, Tesla is no longer a cult stock of Elon Musk's hopes, dreams and lies
"On August 7, 2018, Musk tweeted to his 22 million Twitter followers that he could take Tesla private at $420 per share (a substantial premium to its trading price at the time), that funding for the transaction had been secured, and that the only remaining uncertainty was a shareholder vote," the SEC claimed in a statement.
It continues: "The SEC's complaint alleges that, in truth, Musk had not discussed specific deal terms with any potential financing partners, and he allegedly knew that the potential transaction was uncertain and subject to numerous contingencies."
The SEC claims that the Tweets caused Tesla's stock price to jump by more than six per cent on the day they sent. However, the company's stock price subsequently fell, bottoming out at £261.29 on 7 September.
[Musk] thought his girlfriend 'would find it funny, which admittedly is not a great reason to pick a price'.
Before markets open in the US today, the company's stock price officially stands at $307.44, but in after-hours trading yesterday evening - an indication of where it's headed today - it dropped by almost 12 per cent to $270.89.
"Taking care to provide truthful and accurate information is among a CEO's most critical obligations," said Stephanie Avakian, co-director of the SEC's Enforcement Division. "That standard applies with equal force when the communications are made via social media or another non-traditional form."
So far, neither Musk nor Tesla has commented. The SEC, however, went on to claim that Musk sent the tweets in order to impress his girlfriend, rapper Grimes, with the $420 number (apparently) significant in marijuana culture.
The financials show you that Tesla is a very troubled business on the precipice of financial collapse
"According to Musk, he calculated the $420 price per share based on a 20 per cent premium over that day's closing share price because he thought 20 per cent was a 'standard premium' in going-private transaction," the SEC suit claims.
It continues: "This calculation resulted in a price of $419, and Musk stated that he rounded the price up to $420 because he had recently learned about the number's significance in marijuana culture and thought his girlfriend 'would find it funny, which admittedly is not a great reason to pick a price'."
Elon Musk and Tesla also face a class-action lawsuit over his ill-advised tweets, both by short-sellers who were burned by Musk's tweets, as well as investors disgruntled at the continuing decline in Tesla's stock price, which they also attribute to Musk's recklessness.
I believe the [Tesla] equity will become nearly worthless
Gabe Hoffman, general partner of Accipiter Capital Management, speaking to CNBC, suggested that the affair could result in Tesla's bankruptcy.
"Elon Musk will be out as CEO of Tesla. At that point, Tesla is no longer a cult stock of Elon Musk's hopes, dreams and lies - you have to value Tesla as a business. I believe the financials show you that Tesla is a very troubled business on the precipice of financial collapse," Hoffman said.
Hoffman's investment firm has ‘shorted' Tesla. That is to say, bet that the company's stock price will go down, by borrowing stock from an investor and selling it in the expectation that he can buy it back later at a lower price before the loan period expires. He therefore has a financial interest in seeing the company's stock price going down.
However, he points to the value of the company's bonds as indicative of the company's true value.
A set of bonds due for repayment in 2025 are currently trading at 86 cents in the dollar, indicating a high degree of scepticism over the company's long-term future, according to Hoffman - and that was before news of Tesla's prosecution was released.
"The bond market is always smarter than the stock market", added Hoffman. "I believe the [Tesla] equity will become nearly worthless," he concluded.
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18 September 2018: Tesla is to face a criminal investigation into founder and CEO Elon Musk's privatisation tweets. The investigation comes at the same time that Musk is also facing a civil lawsuit over his renewed claims that the British pot-holer who helped rescue a junior football team from a Thai cave was a "paedo".
Claims that the US Department of Justice (DoJ) is to formally investigate Musk over his claims, made over Twitter that he had "funding secured" to take Tesla private last month when the company's stock was tanking, were made today by Bloomberg, citing "two people familiar with the matter".
Musk made the claims that he was planning to take Tesla private at a stock price of $420 as the company's stock languished at around $360, with the price driven down by short-sellers, people who bet on a company's stock price falling. The tweets implied that a proposal was imminent, but weeks later Musk retracted, claiming that the privatisation process would be a long-winded distraction.
"The investigation by the US attorney's office in the Northern District of California follows a subpoena issued by the Securities and Exchange Commission seeking information from the maker of electric cars about Musk's plans to go private," according to Bloomberg.
However, Bloomberg's sources also add that the criminal inquiry is currently in its early stages, and the investigation could take months before a decision is made to prosecute or not.
Tesla's stock price, meanwhile, has steadily fallen over the past month and dropped below $280 on the news today, giving the company a market capitalisation of under $50 billion.
Neither Tesla, nor the DoJ were prepared to comment on the claims.
The news comes as the pot-holer who helped rescue the junior football team stranded in a cave in Thailand launched a legal action for defamation, after Musk reiterated his claims that he was a paedeophile.
Musk had originally made the claims in August after the pot-holer, Vernon Unsworth, had slammed Musk's idea to design a submarine to help get the children out. Instead, Unsworth had led a rescue alongside Thai special forces that enabled the sedated children to be rescued from the flooded cave, one-by-one, with assistance.
Following an outcry, Musk retracted the claims - only to reiterate them earlier this month.
The Briton's complaint, filed in the US District Court for the Central District of California, claims that the action has been launched in order to "hold Musk legally accountable for his wrongdoing and to vindicate his [Unsworth's] reputation". Neither Musk, nor Tesla, has commented on the case.
"Elon Musk falsely accused Vernon Unsworth of being guilty of heinous crimes. Musk's influence and wealth cannot convert his lies into truth or protect him from accountability for his wrongdoing in a court of law," Unsworth's lawyers told the Wall Street Journal in a statement.
Unsworth is seeking compensatory damages of more than $75,000, as well as punitive damages, and an injunction preventing Muks from publishing any more "false and defamatory accusations".
12 September 2018: Researchers in Belgium claim that the keyless fobs used on Tesla's Model S electric cars can potentially be cloned, enabling the cars to be stolen.
Furthermore, attacks against the Passive Keyless Entry and Start (PKES) system used on the Model S could affect other makes and models of vehicle.
The security flaws affect PKES technology supplied by a company called Pektron, and the attack has so far only been demonstrated to work with the Tesla Model S.
According to the Computer Security and Industrial Cryptography (COSIC) group at the Catholic University of Leuven (KU Leuven) in Flanders, Belgium the system is vulnerable to relay attacks.
Recent news reports and home security videos have shown that relay attacks are frequently used to steal luxury vehicles
"In this type of attack two adversaries relay the short-range communication over a long-range communication channel. Recent news reports and home security videos have shown that relay attacks are frequently used to steal luxury vehicles," warns KU Leuven's COSIC group.
To reduce the risk of such attacks, makers of PKES technology have responded by introducing distance bounding mechanisms.
However, one of the problems identified in the group's research into the Pektron technology used in the Model S is that the DST40 proprietary cipher used is out of date.
"During normal operation the car periodically advertises its identifier (denoted ‘wake' in the figure below). The key will receive the car's identifier, if it is the expected car identifier the key fob will reply, signaling it is ready to receive a challenge.
The lack of mutual authentication allows anyone who knows the car's identifier to get responses from a key fob.
"In the next step the car will transmit a random challenge to the key fob. The key fob computes a response and transmits it. After receiving the key fob's response, the car must verify it before unlocking the doors. The same challenge response protocol is repeated to start the car.
"The simple challenge-response protocol described earlier does have some issues. For example, the lack of mutual authentication allows anyone who knows the car's identifier to get responses from a key fob. This identifier is broadcasted by the vehicle in the wake messages and can be recorded by anyone."
Even worse is the outdated 40-bit cryptography used for computing responses, the University's research continues, which was reverse engineered more than 10 years ago.
The combination of a very small key-space and lack of mutual authentication allow us to perform a Time-Memory Trade-Off attack
"DST40 transforms a 40-bit challenge into a 24-bit response… this transformation is dependent on a 40-bit secret cryptographic key. Additionally, Because the response or output (24-bit) is smaller than the input or challenge (40-bit) there will be multiple cryptographic keys that produce the same response to a given challenge. Because of this, an attacker requires at least two challenge response pairs to recover the cryptographic key.
"Since the car's identifier is public we can transmit any chosen challenge to a key fob and observe the response. We can thus transmit the same challenge to each key fob we try to attack. The combination of a very small key-space and lack of mutual authentication allow us to perform a Time-Memory Trade-Off (TMTO) attack."
The University - presumably using a borrowed Model S - has produced a proof-of-concept video demonstrating how its attack can work in the real world, using a Raspberry Pi 3 Model B+ and a number of other cheap components.
In the short-term, Model S owners could keep their key fobs in a Faraday bag or metal box to block the RF transmissions. "Tesla Model S owners should [also] disable passive entry and enable the pin to drive feature," the researchers conclude.
Latest Tesla news: Tesla Model 3 the focus of March 2019 Pwn2Own contest
Hackers to compete for prize money of between $35,000 and $250,000 cracking the Tesla Model 3 at this year's Pwn2Own contest
7 September 2018: Tesla's new chief accounting officer is to leave the company after just one month in the job.
Unusually, though, the revelation has only come to light via a filing published by the Securities and Exchange Commission (SEC), rather than a statement from the company.
As news of the abrupt departure emerged, along with the departure of a second senior executive and another less than stellar media appearance by Tesla founder Elon Musk, Tesla's stock price fell by more than five per cent in response.
The company's stock price now stands at around $265, compared to the level of around $360 before Musk tweeted that he was considering taking the company private, "funding secured".
Perhaps of more concern to the company, though, was the concomitant fall in the value of the company's bonds, some of which will require repayment in the next year.
In the SEC filing, Dave Morton - who only joined the company on Monday 6 August - suggested that he was unhappy with the very public role he would have to play as Tesla's chief accountant. He quit on 4 September.
"Since I joined Tesla on August 6th, the level of public attention placed on the company, as well as the pace within the company, have exceeded my expectations. As a result, this caused me to reconsider my future. I want to be clear that I believe strongly in Tesla, its mission, and its future prospects, and I have no disagreements with Tesla's leadership or its financial reporting," Morton was directly quoted in the filing.
According to Bloomberg, too, Tesla's chief people officer - a role formerly known as head of human resources and, before that, as head of personnel - has also decided not to return to the company following a holiday. She leaves just over a year after joining.
It comes as Musk was filmed in an interview with a YouTube channel smoking a joint, and in the same week that he returned to his claim that the caver who helped rescue 12 boys trapped underground in Thailand in mid July was a "child rapist".
Musk will soon, therefore, almost certainly find himself defending himself against a libel action that the caver, Vernon Unsworth, has threatened to file.
25 August 2018: Tesla founder and CEO Elon Musk has said that he won't be taking the company private after all - almost three weeks after he tweeted that he was considering such a move, "funding secured".
Following discussions with the company's long-term investors, Musk said that shareholders believe the company would be better off as a public company, and admitted that the process might take longer and be more time consuming than anticipated.
In a blog posting published on Friday, Musk wrote that he had spent "considerable time listening to current shareholders, large and small" in recent weeks.
He added: "Given the feedback I've received, it's apparent that most of Tesla's existing shareholders believe we are better off as a public company. Additionally, a number of institutional shareholders have explained that they have internal compliance issues that limit how much they can invest in a private company."
A number of institutional investors would therefore have to cash-in at the offer price of $420 per share. However, Musk's privatisation plan hinged not on raising the full amount required to buy-out every last shareholder, but on most of them agreeing to convert their public shareholding into a private shareholding.
If some institutional shareholders were forced to sell-up, Musk claimed that he would still be able to cover the cost. Nevertheless, taking the company fully private, buying out every last shareholder at $420 per share, would have cost Musk around $72 billion, making it one of the largest-ever buy-outs in corporate history.
Musk continued: "Although the majority of shareholders I spoke to said they would remain with Tesla if we went private, the sentiment, in a nutshell, was ‘please don't do this'."
He added: "I knew the process of going private would be challenging, but it's clear that it would be even more time-consuming and distracting than initially anticipated. This is a problem because we absolutely must stay focused on ramping Model 3 and becoming profitable."
Musk will still face questions from the Securities and Exchange Commission (SEC) over his tweet of 7 August in which he appeared to imply that a move was imminent. The suggestion that the company could be going private at a price of $420 per share boosted the company's share price, making a paper loss for short sellers who had been betting that the company's share price would fall.
However, when it became clear that a deal was a long way from conclusion, the company's stock price fell. It then fell further following news that the Securities and Exchange Commission were looking into the tweet, and a New York Times interview that appeared to indicate that Musk was burning out.
The company's stock price current stands at $322.82 this weekend after dipping below $300 earlier in the week.
Computing's Cloud & Infrastructure Summit Live returns on Wednesday 19 September, featuring panel discussions with end-users, strategic and technical streams and a session with guest speaker Inma Martinez. The event is FREE to qualifying IT leaders and senior IT pros, but places are going fast. Register now!
20 August 2018: Tesla's stock price has continued to fall, going as low as $291.70 in trading today, following on from Musk's admission last week that his plan to take the company private is further away that he had implied.
On top of that, investment bank JPMorgan Chase this morning cut its target stock price for the company from $308 to $195 based on the belief that Musk does not have the "funding secured" for his proposed buy-out, after all, although the stock price bounced back later in the day, at the time of writing it has been pegged back to around $301.
And it has also emerged that the Saudi Arabian sovereign wealth fund that Musk had cited as a key backer of his plan has also invested in Lucid, a much less high-profile potential rival to Tesla in the burgeoning market for electric vehicles. The proposed Lucid deal, according to Reuters, would give the Saudi Public Investment Fund a controlling stake in Lucid.
The fall in the company's share price comes as Tesla faces a growing number of loan repayments, this year and next, and the possibility that it will need new investment to take it through to profitability.
"Tesla is going through money so fast that, without additional financing, there is now a genuine risk that the 15-year-old company could run out of cash in 2018," noted Bloomberg earlier this year. "Tesla ended 2017 with $3.4 billion in cash on hand and $9.4 billion in outstanding debt," it added.
Cash flow has only been positive for one quarter since 2014, it added, with the company burning through $7,430 every minute, Bloomberg claimed.
A major part of Tesla's current financial state has been down to a hiring binge that brought the company's staff numbers to just under 40,000 staff, as it sought to meet ambitious production targets. However, revenues per employee are now half that of established car makers, while recent research has indicated that Tesla's $35,000 base-level Model 3 won't be profitable.
Bloomberg added: "Bruce Clark of Moody's Investors Service expects that Tesla will need an additional $2 billion - in the form of equity, convertible notes, or debt - in order to cover 2018 cash burn and $1.3 billion of existing convertible debt that comes due by 2019."
And that's the nub of Tesla short-sellers current arguments.
Equally seriously, perhaps, Musk also has loans with Morgan Stanley Smith Barney and Goldman Sachs totalling $624.3 million secured against his Tesla shareholding.
While some of this may be used by Musk to maintain his carbon-intensive lifestyle (Musk owns five Beverly Hills mansions and a private jet), some of it was also used to buy-out Solar City, a company founded by two of Musk's cousins. Some of it may also have found its way to Musk's Boring Company, which raised $113 million in April this year.
"If the price of our common stock were to decline substantially, Musk may be forced by one or more of the banking institutions to provide additional collateral for the loans or to sell shares of Tesla common stock in order to remain within the margin limitations imposed under the terms of his loans," a Tesla filing with the SEC warns.
Should the Tesla stock price fall below a certain level, Musk will almost certainly be required to meet a margin call; that is to say, to pay back a certain amount of the loans to the banks in order to maintain the value of the collateral they are holding.
The filing also warns that such a move would likely instigate a further fall in Tesla's stock price.
Computing's Cloud & Infrastructure Summit Live returns on Wednesday 19 September, featuring panel discussions with end-users, strategic and technical streams and a session with guest speaker Inma Martinez. The event is FREE to qualifying IT leaders and senior IT pros, but places are going fast. Register now!
17 August 2018: The share price of fashionable electric car maker Tesla has plunged today amid reports of a ‘widening probe' by the SEC into founder and CEO Elon Musk's share-price boosting tweets.
The company's stock price has dropped almost eight per cent from $335.45 at the close yesterday to $309.4 at the time of writing.
News of the intensifying investigation came after Musk admitted that his tweet last week about taking the company private, "funding secured", had been done with no review by the board of the company - and while he was driving.
Musk made the admission in an interview in the New York Times published yesterday, which did little to calm investor jitters over Musk's leadership.
The mounting problems coincide with claims by investment bank UBS that the powertrain of the Tesla Model 3 car costs $950 more than the company had anticipated, and that the basic $35,000 model losses money and therefore won't help to drive the company into profitability, as claimed earlier this year by Musk.
"While Tesla's powertrain was better than peers in terms of cost per kilowatt-hour and performance, their lead was not as large as we would have expected," wrote UBS analyst Colin Langan in the research note, which Reuters has got hold of.
The investment bank went as far as to get hold of the $49,000 upgraded Model 3 and strip it down in its Evidence Lab. Its research indicates that Tesla's gross margin on the high-end Model 3 comes in at 18 per cent, compared to the 21 per cent BMW achieves with its 330i model.
The Tesla powertrain costs twice as much as BMW's, the UBS research note indicates, and around 50 per cent more than Tesla's guidance suggested it would.
"With these economics, we expect the $35k base Model 3 to lose about $6k/car," Langan said.
And if that wasn't enough, Tesla whistleblower Karl Hansen this week doubled down on his claims that the company spied on workers, and ignored or covered-up allegations of theft of as much as $35 million of raw materials from the company's Gigafactory battery manufacturing plant in Nevada. He also claimed that an employee linked to a Mexican drugs cartel had been pushing drugs at the plant.
In the interview with the New York Times yesterday, Musk claimed that he was working 120 hours per week - not just running Tesla, but also the Gigafactory battery plant, SpaceX, Hyperloop, Neurolink and The Boring Company - hadn't taken a week off work since 2011, when he had Malaria, and was taking the sleeping drug Ambien, which also comes with an impressive litany of potential side effects.
The board has urged Musk to appoint a number two with wide-ranging authority in order to lighten the workload on his shoulders.
Musk claimed, though, that the worst was now over for Tesla following a tumultuous few months in which the company has struggled to ramp up production of its Model 3 vehicle.