Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk isn’t worried about his company’s stock price in light of recent declines after the Model S fires. He reports that in spite of all the bad press they’ve gotten recently, sales for the current quarter are going well. He also expects regulators to clear their vehicle after those fires and, in an interview with Associated Press, defended the design of the Model S in spite of the three fiery wrecks.
You may remember that a couple of times this year, Musk said himself that he felt like Tesla’s shares were overvalued. Shares have fallen 37% since the first fire was reported in the Model S. Nonetheless, Musk says that the market is simply correcting the high share price.
He hasn’t indicated just what he thinks the automaker’s valuation should be, but it’s telling that he admits that it was too high.
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Q4 sales going well for Tesla
According to Musk, Tesla Motors Inc (NASDAQ:TSLA) is seeing better-than-expected sales for the December quarter so far. Consumer Reports readers gave the Model S the highest owner satisfaction score recently in a survey.
Musk has said that all the media coverage surrounding the Model S fires has been unfair, although analysts believe that, unfair or not, it will impact the automaker’s sales. We will just have to see how well Tesla ends the current quarter and whether the company remains ahead of expectations as it is now. We’re already almost two months from the first fire, so you would think sales would already have been affected by now, although it’s hard to say for sure.
Musk: regulators will clear Tesla
It was revealed that the National Highway Traffic Safety Administration is investigating the two Model S fires which happened in the U.S. Musk thinks that the agency will clear them and not issue a recall. If a recall is ordered, we’re probably months away from that.
He notes that both of the U.S. crashes involved a “large piece of metal essentially braced against the tarmac.” He again emphasized that no one was hurt in any of the three Model S crashes, which shows that the vehicle is safe, even in dangerous situations. The CEO also noted that any kind of vehicle is going to have significant damage if the vehicle goes over a big metal object.
Musk also noted that aside from safety, another reason regulators may investigate is because of economic loss from the fires, but Tesla Motors Inc (NASDAQ:TSLA) averted that complaint by amending its warranty to cover fire damage for just about any reason except purposely lighting your Model S on fire.
Musk defends Model S design
Musk also explained why they designed the Model S the way they did. He said putting the battery underneath the passenger compartment provided a low center of gravity, making the car easy to handle and also keeping debris from actually penetrating the bottom of the car. He said in any other car, the objects could potentially have come through the floor and injured people, but the Model S is designed
After the third fire, Tesla rolled out a software update to the Model S sedans which are on the road. The automaker increased the speed at which the Model S lowers itself to make aerodynamics better. Now instead of lowering at 50 miles per hour, the speed got bumped up to 87 miles per hour, which means unless you’re driving on the autobahn in Germany, you shouldn’t hit the speed at which the vehicle lowers itself. Musk said the autobahn tends to be mostly free of debris, unlike roads in the U.S., where obviously debris is a problem for lower-riding vehicles. That extra inch could make it more difficult for incidents like the two U.S. crashes to happen again.
Shares of Tesla Motors Inc (NASDAQ:TSLA) rose more than 1% in early afternoon trading.