Tesla Motors Inc (NASDAQ: TSLA) witnessed a major fall in their shares this week after videos and images of their Model S caught on fire surfaced on Wednesday. The actual incident occurred on the highway near Seattle on Tuesday. Following the mishap, the company’s shares saw a 5% drop, which was the highest since mid-August.
Addressing the incident, the CEO, Tesla Motors assured all the owners and potential buyers of its Model S regarding the security of these electric cars. The fire incident posed some serious questions about the safety of Tesla Motors’ electric cars, which had a direct impact on the company’s market value.
In a comment made in the Tesla Motors official website’s blog, Musk assured his consumers that a car powered by a battery is a lot safer than a gas-driven one, indicating that their electric car customers had nothing to worry about. The comment was particularly targeted at Model S owners who, after the fire incident, had grave concerns about their safety.
Further explaining the cause of the incident, the CEO commented that the vehicle had a collision with a fairly sizable metal object, which caused the flames. He said that the impact damaged the armor plate that protects the car’s battery pack with a power of almost 25 tons causing a hole as wide as three inches in the quarter-inch thick armor. Upon this collision, the driver jumped out of his sedan after being instructed by the Model S’s alert system to do so. This prevented any injuries to the driver.
Musk’s comment helped the company’s shares recover after seeing a concerning drop on Wednesday and Thursday. The stocks were valued at $180.98 on Friday on the Nasdaq indicating a 4.4% rise.
Musk did not mention any potential design changes in their Model S as a result of the accident, which was the first ever reported battery fire in any of the company’s vehicles. In the past couple of years (TYO:7011)’s i-MiEV of General Motors Company and NYSE:GM)’s Chevrolet Volt of Mitsubishi Heavy Industries, Ltd faced a similar situation. The Boeing Company, earlier in the year, also handled a fire in the lithium-ion battery of their Dreamliner Plane.