Tesla Motors Inc. (NASDAQ:TSLA) has been in stepped-up damage-control mode since the third Model S fire in six weeks was reported in Smyrna, Tenn., Wednesday. As with the two previous incidents, the company quickly reached out to the car's owner, orthopedic surgeon Juris Shibayama, to get his story out.
Tesla is hoping to quell any suspicions that its Model S luxury electric sedan poses a greater risk of catching fire than cars with conventional internal-combustion engines. The National Highway Traffic Safety Administration maintains that electric vehicles are not more prone to fires than cars powered by internal combustion engines.
Following the first reported Model S fire, on Oct. 1 in Kent, Wash., the NHTSA ruled that an in-depth investigation was unwarranted. The second fire took place Oct. 17 in Merida, Yucatan state, Mexico, after a driver who was reportedly drunk hit a wall at high speed and crashed into a median. The video shows a white Model S on fire followed by popping sounds and a flare-up -- seen between 10 and 20 seconds into the clip. The driver (who was reportedly intoxicated) had exited the vehicle, slightly injured by the impact, and the fire department responders managed to quickly extinguish the blaze using a blast from the fire truck's nozzle of a dry powder extinguisher.
All three owners, including Shibayama, said they were eager to get Tesla replacements for their burned cars. Nevertheless, this week could see the NHTSA stepping in to investigate, or once again asserting there is no need for further inquiry.
Here’s how the doctor describes what happened, which Tesla posted on the company blog on Saturday:
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"I was driving home from work on the interstate in the right lane at approximately 70 miles per hour, following a truck. In the middle of the lane, there was a rusty three-pronged trailer hitch that was sticking up with the ball up in the air. The truck in front of me cleared the object. I did not have enough time to swerve to avoid the hitch, and it went below my car. I felt a firm 'thud' as the hitch struck the bottom of the car, and it felt as though it even lifted the car up in the air. My assistant later found a gouge in the tarmac where the item scraped into the road. Somewhat shaken, I continued to drive.
"About 30-45 seconds later, there was a warning on the dashboard display saying, 'Car needs service. Car may not restart.' I continued to drive, hoping to get home. About one minute later, the message on the dashboard display read, 'Please pull over safely. Car is shutting down.' I was able to fully control the car the entire time and safely pulled off the left shoulder on the side of the road. I got out of the car, and started to get all my belongings out. About 5-10 seconds after getting out of the car, smoke started to come from the front underbody of the car. I walked away from the vehicle to a distance of about 100 yards. More smoke started to come out of the bottom of the car, and about two minutes after I walked away, the front of the car caught on fire."
The doctor goes on to laud the vehicle's advanced warning system. It took about five minutes from the time of the impact with the hitch before the car caught fire.
Here’s what Dan Edmunds, director of vehicle testing at the automotive information and pricing provider Edmunds.com, had to say about the incident in a statement issued Thursday:
"Is there a problem with the battery pack, the thing everyone is concerned about? We don't have enough information to tell. We're not yet certain if the pack was involved in the ignition of the third fire at all. But the confined nature of each fire is actually heartening. It tells me that the compartmentalization of the battery pack is preventing the spread of flames back under the cockpit, as designed. The proliferation of flames up front seems to indicate that something else is contributing to the visible flames. It's impossible to know how to think about this until we see and analyze pictures of what the drivers struck and where it impacted the underside of the cars in question."
The Model S aced government crash tests earlier this year, and it has won accolades from Consumer Reports as one of the safest vehicles on the road. The car's sound structural design and the battery pack itself helps protect drivers from impact injury, and Tesla has pointed out that the cabin was shielded enough from the fires that it allowed the drivers to walk away unscathed.
But with only about 18,000 Model S sedans on the road worldwide by the end of September (about 12,550 through the first half of the year plus the “over 5,500” cited in Tesla's third-quarter earnings report last week), it doesn’t take too many such incidents to elicit questions about whether, for example, the undercarriage needs additional protection to prevent punctures from road debris.
The Model S is unique in that it’s really the first electric car that performs like a luxury sports sedan that has potential popular appeal. Unlike other more mass-market EVs, like the Nissan Leaf (which, by the way, is manufactured in Smyrna) or the new BMW i3, the Model S invites high-speed driving. And unlike gas-powered vehicles, the volatile material (the contents of the thousands of battery cells that make up the Model S battery pack) is essentially the vehicle’s underbelly – the part of the car most likely to be smacked and hammered by road debris.
The answer to these concerns may be, as many of the Tesla loyalists keep saying, that there’s too much scrutiny being placed on Tesla based on three fires. But if there’s nothing serious about three flaming Model S sedans in one month, then any inquiries into these accidents won’t do Tesla any long-term harm. If the cars are safe, they're safe and they can withstand the rigors of scrutiny.
Its stock value, on the other hand ... TSLA was already falling after its disappointing earnings report on Tuesday, and the stock fell further after the Tennessee incident. On Friday it was still falling, by 1.3 percent to $137.95, shedding all the gains the stock has made since early August.
TSLA last week: Down 15 percent.
TSLA past 30 days: Down 21 percent.
TSLA past three months: Down 10 percent.
TSLA past six months: Up 147 percent.
TSLA year-to-date: Up 307 percent.