Tesla was in the news today as their stock fell nearly 7 percent today to $190.90, which was actually a recovery from its earlier low of $175. The sudden drop was spurred this morning by a downgrade at Baird, while a YouTube video of a Model S on fire went viral. The accident happened Tuesday on Route 167 in Washington State. The rather large fire was situated at the very front of the Model S. The market fear is that the fire highlights issues with the lithium-ion battery pack used on the electric car, but it should be noted that the fire did not occur anywhere near the battery pack. Many investors are likely concerned after all the issues Boeing had with using lithium-ion batteries in its 787 Dreamliner that caused the 787 fleet to be grounded for more than three months. Other airlines went with proven nickel-cadmium battery technology on their new airplanes as lithium-ion batteries were 'too dangerous' and 'not mature enough' for them.
Tesla Motors said the fire was the result of the car’s collision with some sort of large metal object in the road. Here is the statement that Tesla released today about the fire:
“Yesterday, a Model S collided with a large metallic object in the middle of the road, causing significant damage to the vehicle. The car’s alert system signaled a problem and instructed the driver to pull over safely, which he did. No one was injured, and the sole occupant had sufficient time to exit the vehicle safely and call the authorities. Subsequently, a fire caused by the substantial damage sustained during the collision was contained to the front of the vehicle thanks to the design and construction of the vehicle and battery pack. All indications are that the fire never entered the interior cabin of the car. It was extinguished on-site by the fire department.”
Check out the video, which was posted on YouTube: