In a show of support for Tesla Motors Inc (NASDAQ:TSLA), Jefferies analyst Elaine Kwei has boosted her price target on the company’s stock to $210. Kwei referenced the incredible safety of the company’s vehicles in the report and says that the video of the Model S on fire has not shaken Tesla customers as much as some investors seem to believe.
Last week, a video of a Tesla Motors Inc (NASDAQ:TSLA) Model S on fire sparked fears that the company would lose business because of safety fears. The incident probably added to the company’s loss of value last week. Tesla Motors lost more than 10 percent of its values in two days trading, and some worried that the bubble in the firm’s valuation was bound to burst.
Tesla Motors safety
Kwei wrote the report after meeting with Tesla Motors Inc (NASDAQ:TSLA) executives and driving a Model S for the first time. Her comments, which were in line with those of Tesla CEO Elon Musk last week, stated clearly that the risk of fire was much lower in a Tesla Model S than it was in a traditional gasoline powered car.
Kwei said that the Tesla Motors Inc (NASDAQ:TSLA) customers she spoke to in the wake of the accident were not fazed by the fire. They believed it to be a one-off caused by exceptional circumstances, rather than a risk to their own lives while they were driving the Model S. That means that Elon Musk’s message, which pushed a similar conclusion, is working, at least in some circles.
The event that caused the fire in the Tesla Motors Inc (NASDAQ:TSLA) Model S is probably not going to hurt the company long-term, but it does demonstrate how unstable the price of a stock with such a high valuation can be. By this afternoon, Tesla Motors had regained most of the value it lost in the wake of the accident.
Tesla moving forward
Tesla Motors Inc (NASDAQ:TSLA) is not going to dwell on this incident, and the company will probably not have to record it in its history books. The fire incident was an example of a car saving someone from possible injury. It did not demonstrate a lack of safety in electric cars, or with Tesla vehicles. If anything, it did the opposite.