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Tesla stems bleeding after bad few days
November 09, 2013, 05:00 AM By Tom Krisher The Associated

DETROIT — Investors in the Tesla electric car company stemmed the bleeding a bit Friday. But it was still an abysmal few days, marred by another fire in a Model S and earnings results that many found disappointing.

Tesla’s shares dropped a total of $37 on Wednesday and Thursday and were down another $7 by noon Friday before recovering to finish with a loss of $1.82. Twenty-two million shares traded Friday, almost double the average daily volume.

In three days, Tesla shareholders lost $4.7 billion, or nearly 22 percent of their investment. Billionaire CEO Elon Musk, who held about 28 million shares as of May 30, or a nearly a quarter of the stock, lost more than $1 billion as Tesla stock plunged from $176.81 at the close Tuesday to $137.95 on Friday.

Tesla could face more challenges next week. The National Highway Traffic Safety Administration, the U.S. government’s auto safety watchdog, said Friday it is in close contact with Tennessee officials, gathering information before deciding if a full investigation is needed.

However, by late Friday afternoon, NHTSA had not spoken with the trooper investigating the fire, said Tennessee Highway Patrol spokeswoman Dayla Qualls in an email to the Associated Press.

For most of the year, Tesla Motors Inc. was a Wall Street darling as the Model S received a top safety rating from the NHTSA and accolades from Consumer Reports and other magazines. Tesla, which is based in Palo Alto posted its first quarterly profit in the second quarter. Tesla’s stock rose more than 470 percent from Jan. 1 through Sept. 30. The next day came the first fire in a Model S, outside of Seattle.

This week, a similar incident involving road debris occurred near Smyrna, Tenn. Before pictures of the fire appeared online, investors were already concerned by the company’s earnings report and a statement from Musk about Tesla needing more lithium-ion batteries to keep up with demand.

The Tennessee blaze appeared to be similar to one on Oct. 1 in Kent, Wash. In that fire, a curved piece of metal punctured a shield and the battery, which is mounted under the passenger compartment in the Model S.

Experts say that if an object pierces a battery cell, that can cause sparks or arcing and touch off a fire. It’s still unclear if the battery was involved in the Tennessee fire.

In between those instances, a Model S caught fire in Mexico after hitting a concrete wall and a tree at a high speed.

Clarence Ditlow, who heads the Center for Auto Safety and is a frequent NHTSA critic, said Friday that the agency should have immediately sent investigators to Tennessee.

“Two or three similar fires (depending on whether one counts Mexico) in a vehicle population of 19,000 demands an investigation,” Ditlow wrote in an e-mail. “New technology requires a heightened level of scrutiny so small problems can be nipped in the bud before they become big problems.”

The low-slung Model S has a 6-inch clearance between the ground and the undercarriage. Other cars with gas engines sit lower, such as the Mercedes CLA Class at 3.9 inches and a Dodge Charger at 5 inches, according to the Edmunds.com auto website. But the Tesla automatically lowers itself about another inch at highway speeds, the company’s website says.

“It’s done in the name of improving aerodynamics to reduce drag and improve efficiency,” said Edmunds.com vehicle test director Dan Edmunds.

————

Associated Press Writer Bruce Schreiner contributed from Louisville, Ky.

 

 

Tags: tesla, friday, model, tennessee, before, safety,


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