Tesla shares fell for the third consecutive day as another Model S caught fire in Smyna, Tenn., Nov.6.
The all-electric vehicle caught fire Wednesday and the driver and passenger walked away unharmed. Federal investigators have not looked into the two previous fires but are deciding whether to investigate the most recent accident.
“NHTSA will contact the local authorities who are looking into the incident to determine if there are vehicle safety implications that merit agency action,” stated the National Highway Traffic Safety Administration Thursday.
Safety
Tesla Motors Inc.’s Model S Sedan earned the safest rating given by the NHTSA just a few months ago. Lithium-ion batteries like the ones used in Tesla’s electric vehicles have been an area of NHSTA study, due to the possibility of the batteries catching fire when overheated.
While the recent fires have caused investor worries and put a dent in the stock price, Tesla supporters and statistics point out the results of the fires are a credit to the safety of the vehicles, not the reverse.
The first fire occurred Oct. 1 outside Seattle when a Model S hit a large piece of metal. The second crash on Oct. 18 happened in Merida, Mexico when a driver was speeding and crashed into a wall and tree. According to CNET, the fire Wednesday was caused when the driver ran into a trailer hitch left in the road.
None of the drivers or passengers were injured, and both Tesla drivers from the Seattle and Mexico incident had said they planned to purchase another Model S.
CEO Elon Musk addressed the fire on the company blog after the first occurrence, writing “there should be absolutely zero doubt that it is safer to power a car with a battery than a large tank of highly flammable liquid.”
According to the National Fire Protection Association, an average of 152,300 automobile fires occur a year.
Battery Pack
The Tesla battery pack separates the 16 batteries with fire-resistant barriers, placed between the wheelbase under the car and protected by a quarter-inch of aluminum. The packs are designed to minimize and keep potential fire to the front of the car.
The NHTSA did not believe the first fire was a vehicle safety defect and did not investigate. The second fire was a driver error so there was no investigation either.
Tesla itself will scrutinize the Tenn. fire, and the NHTSA will wait to hear back from local authorities before making a decision.
Tesla Stock
Tesla stock took a dive after news of the first Model S fire hit as well, falling almost 7 percent. After a stellar rise in 2013, analysts thought the stock was due for a pull-back at that time.
Shares fell again after the second incident, but not as much.
After the company announced third quarter losses and a battery shortage, shares fell 15 percent on Wednesday. The news of the third fire further disappointed investors and shares dropped another 7.5 percent. Before, Tesla had nearly quadrupled its valuation this year.
