Shares in Tesla Motors continued their slide Thursday, on the news that a third Model S has caught on fire, this time after an accident in Tennessee. The fire is the third to affect a Model S in six weeks. Shares tumbled 8 percent Thursday to close at $139.77. The National Highway Traffic Safety Administration, which gave the Model S stellar safety ratings earlier this year, issued a statement saying they will “determine if there are vehicle safety implications that merit agency action.”
“We have been in contact with the driver, who was not injured and believes the car saved his life,” said Tesla in a statement Thursday. “Our team is on its way to Tennessee to learn more about what happened in the accident. We will provide more information when we’re able to do so.”
There are more than 150,000 vehicle fires each year. But any fire involving Tesla’s Model S is far more likely to make headlines. All three fires have occurred after unusual accidents and were not spontaneous events.
A spokeswoman for the Tennessee Highway Patrol told the Associated Press that the Model S ran over a tow hitch on a freeway. The hitch hit the undercarriage of the car, causing an electrical fire that engulfed the front of the car.
“All three Tesla accidents and fires have resulted in no injuries to the drivers,” said Karl Brauer, a senior analyst at Kelley Blue Book. “The problem is that we have three fires in six weeks. At some point the cause of the fire, the safety of the drivers and even the attitude of the owners (all three apparently want another car) stops mattering because you’re left with recurring headlines featuring the words “Tesla” and “Fire.” For a company with a stock price based as much or more on image than financials, those recurring headlines are highly damaging.”
A Tesla Model S in Tenneseee. Photo courtesy of E@Nashvillain, who posted the photo Thursday on his Twitter account.
Tags: Tesla Motors