Tesla’s shares were down as much as 5.7% today to $US170.60, but have since pared some losses. The stock closed down 6.2% on Wednesday after a video of a Tesla Model S vehicle on fire went viral. This raised questions about the safety of its battery.
Yesterday, Tesla released a statement that the fire “fire caused by the substantial damage sustained during the collision was contained to the front of the vehicle thanks to the design and construction of the vehicle and battery pack.”
An AP report today says the fire “began in the vehicle’s battery pack” and that this made it hard for firefighters to put out the fire. But Tesla maintains the fire wasn’t “spontaneous.” From AP:
“In an incident report released under Washington state’s public records law, firefighters wrote that they appeared to have Tuesday’s fire under control, but the flames reignited. Crews found that water seemed to intensify the fire, so they began using a dry chemical extinguisher.
“After dismantling the front end of the vehicle and puncturing holes in the battery pack, responders used a circular saw to cut an access hole in the front section to apply water to the battery, according to documents. Only then was the fire extinguished.”
Deutsche Bank analysts led by Dan Galves wrote that they expected “negative news flow and investor concern over the impact to demand of this incident will put negative pressure on the stock in the near-term,” but pointed out a few reasons that investor concerns should wane.
Here’s a look at Tesla’s five-day performance.