Tesla CEO Musk Insists Model S Safe Despite Fire

Battery sedan “safer” than gasoline-powered cars, Musk insists.

by on Oct.07, 2013

The images shown on the Internet "exaggerate" the Tesla Model S fire, claims vehicle's owner.

Investors may be worrying about the impact of a fire that severely damaged a Tesla Model S battery car last week, but the maker’s CEO is not only defending the design of the electric vehicle but arguing that the accident proves it safer than a comparable, gasoline-fueled vehicle.

Fond of using the Internet to get his messages across, Tesla founder and CEO Elon Musk took to the company’s blog to respond to concerns about a fire that erupted under the hood of a Model S last Tuesday, an incident that was captured on video and has been widely viewed on Youtube and other sites. There were no injuries in the incident, apparently in part due to the vehicle’s own warning system which advised the driver to pull over and exit before the fire erupted in the battery compartment.

Blazing News!

The vehicle’s owner – who is also a Tesla shareholder – reported to rescue crews arriving on the scene that he had apparently struck metal debris on the road in suburban Seattle. In his blog report, CEO Musk echoed that, reporting that the vehicle took a hit powerful enough to punch a 3-inch hole through the armor plate designed to protect the Model S battery pack.

Suggesting that the situation might have been worse if a gas tank took a similar blow, Musk wrote, “For consumers concerned about fire risk, there should be absolutely zero doubt that it is safer to power a car with a battery than a large tank of highly flammable liquid.”

Whether that argument will pass muster with potential buyers – or investors – remains to be seen, however. Prior to the fire, Tesla had been on a roll, racking up two consecutive profitable quarters as sales outstripped demand and investors pushed the stock up by almost 400% since just the beginning of the year.

It’s too early to tell what impact the wide-ranging coverage of the Seattle fire might have on Tesla sales, but shares have already been hammered.  They ended last week down by $9.92 cents, or more than 5%. Of course, it didn’t help to have an influential analyst also raise concerns about Fisker stock: R.W. Baird’s Ben Kallo downgrading Tesla shares from “Outperform” to “Neutral,” due to what he called “significant milestones” facing the company.

(Tesla fire gives chills to investors. Click Here for the story.)

For his part, automotive analyst George Peterson, of AutoPacific, Inc., is downplaying both the fire and the hit Tesla stock has taken. “Last week’s event just gave investors rationale to get out” and take some profits on the high-flying stock, he said.

Meanwhile, Peterson echoed Tesla CEO Musk who, in his blog, noted that the Model S blaze was just one of an estimated 194,000 vehicle fires reported each year.

Should this be an isolated incident, the analyst predicted, the brouhaha should soon blow over. On the other hand, repeated fires “would suggest there might be a basic flaw in the car,” and that could have a much broader impact on Tesla sales and stock.

(Tesla announces first recall of Model S sedan. Click Here to find out why.

For now, it is clear Musk believes that the facts work in Tesla’s favor. Ironically, a third-party endorsement of the maker’s analysis may be late to come – if ever. Normally, the fire would have triggered an investigation by the National Highway Traffic Safety Administration, but its field investigators are among the 800,000 federal employees now on furlough due to Washington’s budget impasse.

So, for now, Tesla is taking the lead in the investigation. Its reports appears to match the initial claims made by motorist Robert Carlson, who indicated to first responders in Kent, Washington that he thought he had hit a large chunk of metal. Almost immediately, a warning was flashed on the massive video display system atop the Model S sedan’s center stack advising Carlson to pull over and exit the vehicle. Smelling smoke, he quickly complied.

Tesla CEO Musk’s blog reported that the metal debris smashed through the armor plating around the battery causing a short that then set a small portion of the pack ablaze. He also insisted that the first was limited to a small section of the pack and, perhaps most significantly, never reached the passenger compartment.

Wrote Musk, it “was contained to the front section of the car by internal firewalls within the pack. Vents built into the battery pack directed the flames down towards the road and away from the vehicle.”

(GM wants its Cadillac brand to take on Tesla. Click Here to find out how.)

For his part, a letter from owner Carlson is anything but down on the battery car company. He suggested “the internet images really exaggerate” the extent of the blaze and says he is “still a big fan.” Tesla says it is arranging for a replacement for his vehicle.

Whether it can reverse the potential damage done to its image remains to be seen.

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