In the past couple of months, several fires have broken out as a result of accidents involving Tesla Model S cars and multiple purchasers. As the company fought to repair the damage, their stock price zig-zagged as if it were riding a rollercoaster; this week, USNews.com reports CEO Elon Musk condemning the media coverage of the car fires as “extremely unreasonable.”
When Tesla went public in June 2010, a share sold for $17. Prices were booming as high as $176 earlier this month, but the numbers plummeted as the media circulated news of the fires, the first of which happened on Oct. 1. Acknowledging his awareness of his investors’ expectations, Musk said “I don’t believe in talking up the stock… I think the stock is a good deal where it is right now.”
When questioned about whether a regulator has examined the car fires and if the Model S will be changed to prevent them, Musk reiterated that he considered himself a “perfectionist” when it comes to safety, and that nobody has yet been seriously injured while driving a Tesla.
Musk asserts the car is just as safe as every other car on the road, and that the fire reports are exaggerated. “The headlines are extremely misleading,” he said. Confronting reports from the National Fire Protection Organization that 2010 saw 184,500 vehicle fires in the United States, Musk quipped “How many times have you read about that?”
An unnamed spokesperson for the National Highway Traffic Safety Administration released a statement that read “The NHTSA is in close communication with Tesla and local authorities gathering information about the incident to determine if additional action is necessary.”
Tesla has sold roughly 18,000 cars since launching its first model in 2008; by the end of 2013, Tesla expects to have constructed an additional 20,000 Model S cars.
The fires may have been caused by the car failing to protect its battery pack, but analyst Thilo Koslowski with the Garter automotive technology research firm explained that it’s too early to conclude the fires will be a frequent problem with the Model S.
Max Wolff, chief economist with the ZT Wealth investment firm, said that while the car fires are less of a problem than the media says, they are a huge problem for company perception.
“Tesla is a good company with a good product,” he said. “But Tesla stock is priced as though it is going to take over the automotive industry, and it’s not going to… Tesla is showing there is a demand for these vehicles. They are going to be in pole position on that for the near future. Other boutique makers are going to enter the market. Not so boutique car makers are also going to expand into the electric market, like Ford.”[Image via TeslaMotors.com]