Tesla stock tumbles after Model S catches fire
SEATTLE – Shares of electric car company Tesla sank more than 6 percent Wednesday after an Internet video showed flames spewing from one of the company’s vehicles near Seattle.
Shares of Tesla Motors Inc. fell $12.05 to $180.95 – the stock’s biggest one-day decline since July 16.
The incident happened Tuesday after 8 a.m. as the driver was traveling southbound on state Route 167 through Kent, said Trooper Chris Webb of the Washington State Patrol. The driver stated that he believed he had struck some debris on the freeway, triggering the fire, Webb said, but a trooper who responded to the scene was unable to locate any objects on the roadway.
There were no injuries, and the vehicle was towed away, Webb said.
The automobile site Jalopnik.com posted photos of the blaze that it says were taken by a reader, along with a video. The video shows the front of the Tesla Model S in flames.
In a statement issued Wednesday, Tesla said the fire was caused by “substantial damage” to the car when the driver hit a large metal object in the road. The flames, the company said, were contained to the front of the $70,000 vehicle due to its design and construction.
“All indications are that the fire never entered the interior cabin of the car. It was extinguished on-site by the Fire Department,” the statement said.
Shares of Palo Alto, Calif.-based Tesla have risen more than 400 percent since the start of the year. But investors likely were alarmed, with some selling their shares, out of fear that the fire could be an indication of a flaw in the company’s battery packs.
The company’s battery system and the Model S itself have received rave reviews, including a top crash-test score from the National Highway Traffic Safety Administration and a tie for the highest auto test score ever recorded by Consumer Reports magazine.
After getting the top crash test score, Tesla touted the Model S as being “the safest car in America.” The car’s liquid-cooled 85 kilowatt-hour battery, mounted below the passenger compartment floor, uses lithium-ion chemistry similar to batteries that power laptop computers and mobile phones. Millions of such rechargeable batteries were recalled in 2006 and 2007 after it was discovered they could overheat and ignite.