Tesla Share prices drop after Model S catches fire

Tesla

Shares of Tesla Motors dropped more than 6 percent yesterday after images and YouTube videos of a Model S in flames were posted on popular automotive blogs and news sites.

The incident happened Tuesday after 8 a.m. in Seattle, Washington as the driver was traveling southbound on state Route 167. The fire began in the cars battery after the driver reportedly struck debris on the highway.

Tesla confirmed the authenticity of the images and said the car caught fire after the driver ran over a “large metallic object”.

In a statement issued Wednesday, Tesla said the fire was caused by “substantial damage” to the car and that flames were contained to the front of the $70,000 vehicle due to its design and construction.

According to the report by Kent Fire Department partially published on Jalopnik, the initial use of water only intensified the flames, forcing the crew to use a dry chemical to put out the blaze. Later, they found the battery pack still burning inside the front end and the report claims firefighters had to “puncture multiple holes” in the battery pack to apply water to the burning material in the battery.

The fire and resulting negative publicity represents a PR nightmare for a company that only makes electric cars. The Model S, specifically, is one of the most popular pure electric vehicles in the United States.

Tesla, however, claims that it’s the first fire in one of its cars and that consumers should still consider buying all-electric vehicles from the company.

Tesla stock prices, however, fell rapidly after the story broke yesterday ending the day with a US$12.05-drop as markets closed.

News Source: Reuters
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