In what was a tough week for Tesla Motors Inc (NASDAQ:TSLA) following one of its cars going up in flames, the fire department of Kent, Washington released its report of the incidence essentially mimicking what the automaker said following the crash.
Tesla Model S fire description
The description is as follows:
Unit 1 [the Model S] was traveling SB SR167 JN SR516 in lane 3. Unit 1 struck debris in roadway. Driver pulled off to SR516 and vehicle became disabled. Vehicle then caught on fire.
While no automaker wants a viral video of its only vehicle model on the road aflame, the stock rebounded after getting hammered in yesterday’s trading. The beating the stock took is not necessarily anything more than actual safety concerns, but a video of the care on fire coupled with what most people believe, including its CEO Elon Musk, Tesla Motors Inc (NASDAQ:TSLA)’s stock to be, highly overvalued.
“If you think about what you’d rather be close to, 10 gallons of gasoline or a battery pack, I’d pick the battery pack every day,” said Giorgio Rizzoni, director of the Center for Automotive Research at Ohio State University, where he is a professor of mechanical and electrical engineering.
Tesla shares fall
Still, an Internet video of the Tesla fire spooked investors and caused a sell-off Wednesday and Thursday. Tesla Motors Inc (NASDAQ:TSLA) shares fell 6 percent Wednesday, and they closed Thursday down $7.64, or 4.2 percent, at $173.31.
At that price, Tesla Motors Inc (NASDAQ:TSLA)’s market value has dropped about $2.4 billion in the past two days. Still, if an investor purchased a share of Tesla at $35 on Jan. 2, they’re sitting on a gain of nearly 400 percent. Tesla has dazzled Wall Street by selling more vehicles than expected and posting its first quarterly net profit earlier this year.
Technical problem in Tesla Model S
But Tesla shouldn’t be terribly worried, and shouldn’t be given the company’s claims that the car new it had a problem and instructed the driver to pull over, not something my gas-powered car does unless you count the check engine light that has been on since I purchased it ten years ago.
Tesla Motors Inc (NASDAQ:TSLA) said the “car’s alert system signaled a problem and instructed the driver to pull over.” The incident report said firefighters were on the scene within three minutes, and the fire was knocked down, apparently, by water from the responding pump truck. The flames returned though, and firefighters feared the water stream was intensifying the flames, so they switched to dry chemical extinguishers. Finally, firefighters used a power rescue saw to cut an access hole in the front of the car, poured in more water, and the fire finally stopped. Responders were at the site for 2.5 hours.
At the end of the day, no one was hurt but the stock’s price and much of that was recouped tomorrow. Don’t be surprised if Tesla gets a new car out to the owner by early next week.