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Tesla faces federal probe over vehicle range after Reuters report -WSJ

FILE PHOTO: Tesla's CEO Elon Musk in Beijing

(Reuters) - Federal prosecutors are looking into Tesla performance claims after Reuters reported the electric carmaker exaggerated the potential driving distance of its vehicles, the Wall Street Journal reported on Wednesday.

Reuters reported in July that Tesla cars often fail to achieve their advertised range estimates and projections reported by the cars' own equipment, citing experts who tested or studied them. The company wrote algorithms about a decade ago to create "rosy" in-dash driving range estimates, Reuters reported a source as saying, and set up a "Diversion Team" to cancel range-related service appointments.

The Austin, Texas-based electric carmaker deployed the team because its service centers were inundated with appointments from owners who had expected better performance based on the company’s advertised estimates and the projections displayed by the in-dash range meters of the cars themselves, according to several people familiar with the matter.

Tesla faces many probes, including federal auto safety regulators looking at its Autopilot driver assistance product.

The U.S. Attorney's office in Manhattan also is investigating Tesla's use of company funds on a secret project described internally as a house for Chief Executive Elon Musk, the Journal reported on Wednesday, citing people familiar with the matter. A spokesperson for the federal prosecutors' office declined to comment on the Journal report on the probes.

Musk did not immediately respond to requests for comment.

No dollar figures were disclosed regarding the probe of the house, which the newspaper said was near Austin, Texas.

The Journal reported in July that Tesla board members had investigated whether company resources were misused on the effort.

The U.S. Securities and Exchange Commission has also opened a civil probe, the Journal reported. An SEC spokesperson said the agency does not comment on the existence or nonexistence of a possible investigation.

The probes are in their early stages and may not lead to charges, the Journal said.

Prosecutors focused on the house project were seeking information about personal benefits to Musk, the world's richest man, as well as how much Tesla spent on the project and what it was for, the Journal reported.

(Reporting by Jaspreet Singh and Zaheer Kachwala in Bengaluru, Luc Cohen in New York and Hyunjoo Jin in San Francisco; Editing by Shailesh Kuber, Cynthia Osterman and Lisa Shumaker)