[video=youtube;q0kjI08n4fg]http://www.youtube.com/watch?v=q0kjI08n4fg[/video] http://www.huffingtonpost.com/2013/10/03/tesla-burning-car-loses-3-billion_n_4039456.html DETROIT (Reuters) - A video that went viral of a burning Tesla electric car has emerged as a public relations nightmare for the company, analysts said Thursday, as the "green car" maker lost as much as $3 billion in market value two days after the incident in Washington state. Tesla Motors Inc has confirmed that the car caught fire after the driver ran over a large metallic object on Tuesday morning just south of Seattle, causing extensive damage to the front end of the Model S sedan. Emergency officials at the accident said the fire occurred in the electric vehicle's lithium-ion battery. It was the latest in a string of problems for lithium-ion batteries, which are used heavily in EVs sold by various automakers. However, the battery fire was the first for Tesla, the California-based EV maker founded by billionaire Elon Musk. The fire and resulting publicity sparked a PR nightmare for a company that only makes electric cars, as opposed to mainstream automakers like General Motors Co that derive only a small percentage of sales from EVs, analysts said. "The bar is much higher for Tesla," said James Albertine, analyst at Stifel, Nicolaus & Co, who has a "hold" rating on Tesla shares. "Tesla cannot weather a sustained onslaught of consumer complaints and incidents that could potentially dent the demand curve for the next vehicle." Before the incident, Tesla's stock had soared almost sixfold this year. On Thursday the shares fell as much as 7.2 percent and were still down 3.7 percent at $174.32 in late afternoon trading on the Nasdaq. The video of the burning car was posted online at auto blog Jalopnik and has been widely disseminated by other media. CONTROVERSIAL STOCK "Tesla's a very controversial stock and this will give fodder for the bears. They'll say this is going to slow down sales," said R. W. Baird analyst Ben Kallo. On Wednesday, he downgraded the stock to "neutral" for valuation reasons. He said he saw the fire hurting sales slightly, but he and other analysts still expected strong demand going forward. This is not the first battery fire in an electrified vehicle, as it followed cases in GM's Chevrolet Volt and Mitsubishi's <7211.T> i-MiEV. Boeing Co also dealt with lithium-ion battery fires in its new Dreamliner plane earlier this year. Analysts pointed out that warnings inside the Model S in the Washington incident alerted the driver in plenty of time to pull over and exit, and that the fire never entered the vehicle's interior cabin. Given that Tesla's Model S and the discontinued Roadster have been driven a combined 113 million miles and that this was the first battery fire, the company's rate of catching fire was still only one-tenth the frequency of conventional car fires, Wedbush Securities analyst Craig Irwin said. He has a "neutral" rating on the stock. Tesla officials said the battery and the car worked as designed, keeping the fire under control and allowing the driver time to pull over and safely exit the vehicle. "The fire was caused by the direct impact of a large metallic object to one of the 16 modules within the Model S battery pack," Tesla spokeswoman Elizabeth Jarvis-Shean said. "Because each module within the battery pack is, by design, isolated by fire barriers to limit any potential damage, the fire in the battery pack was contained to a small section in the front of the vehicle," she added. 'DESIGN ISSUE' The incident report filed by the fire department in Kent, Washington, described how firefighters put out the blaze, only to see it then reignite under the car. The report also said that water seemed only to intensify the flames. Firefighters then used a dry chemical extinguisher to douse most of the fire in the battery pack in the front end of the vehicle. Analysts for research firm Kelley Blue Book said the road debris likely compromised the vehicle's cooling system, leading to the fire. They also said the current shutdown of the U.S. government would hamper any investigation. Clarence Ditlow, executive director for the Center for Auto Safety, said there was a "design issue" with the Tesla battery if an object striking the bottom of the car could lead to a fire. The head of the consumer watchdog group called on U.S. safety regulators to set industry standards, including additional protection under the battery packs in EVs. Tesla's battery pack is made up of small lithium-ion battery cells that are also used in laptop computers, an approach not used by other automakers. The battery pack stretches across the base of the vehicle. In comparison, GM uses large-format battery cells in a T-shape in the center of the Volt. Panasonic Corp <6752.T>, which supplies the batteries used in the Model S, declined to comment on Thursday. SHIFT TO LITHIUM-ION The auto industry has been increasingly shifting toward lithium-ion batteries as opposed to the less expensive but heavier nickel-metal hydride battery which is still in use by Toyota Motor Corp <7203.T> in its top-selling Prius. GM, the largest U.S. automaker, uses a lithium-ion battery in its Chevrolet Volt plug-in hybrid, while smaller U.S. rival Ford Motor Co uses the same technology in its green cars, including the C-Max hybrid. The technology is favored in the latest generation of such cars because the batteries can be made lighter, smaller and in a way that retains capacity longer. Lithium-ion batteries are about half the weight of nickel-metal hydride batteries. Still, the Tesla fire was more bad news for a technology that was already the object of some concerns, said Albertine, the analyst at Stifel. The Model S is one of the most popular pure electric vehicles in the United States, with an estimated 14,300 sales for the year through September. The hybrid Volt is powered by both an electric battery and a gasoline engine. In August, the Model S won a five-star safety rating from the U.S. National Highway Traffic Safety Administration in every testing category. The Model S also has the highest rating given by influential magazine Consumer Reports, with a score of 99 out of 100 points. Irwin, the Wedbush analyst, said the fire will be a "learning opportunity," allowing Tesla to make potential design changes for the Model X, a crossover derivative of the Model S coming next year, and the so-called Gen 3 models, a new family of battery-powered compacts priced from around $35,000. (Additional reporting by Paul Lienert, Deepa Seetharaman and Bernie Woodall in Detroit, and Yoko Kubota in Tokyo; editing by Maureen Bavdek, Jeffrey Benkoe and Matthew Lewis)
Re: Tesla Loses Up To $3 Billion In Market Value After Video Of Burning Car Goes Vira New technology always comes with a learning curve. I don't see this as any kind of death knell for electric cars, just a minor setback.
Re: Tesla Loses Up To $3 Billion In Market Value After Video Of Burning Car Goes Vira Seems a little overblown, but that's not uncommon. Some things can be learned from this, and there are some important factors to be fished out. 1 battery fire in 113 million miles? I'll take my chances..Hell, how often do we hear about re-calls for GM, Ford, Chyrsler, Honda, Toyota, etc? Can any of them speak of a track record that good? Ford made Mustangs and Pintos knowing that the gas tank was very dangerous. It didn't take years for the issue to arise, nor was it a fluke issue. It was known almost right away (actually, iirc, Ford know they could afford to pay court costs more than retrofitting cars after they were sold. They soon changed the design on the Mustang gas tank, and I think they fixed the Pintos issues. But the Pinto ship already sailed and sunk by that time.) Well, small section is a little generous. Seems to me this should've had a much stronger skid plate, and in this case, it could be akin to the Mustang (first year design, iirc) and the Pinto's gas tank issues. That is an impressive rating. Thankfully, no one died from this fire and the driver had ample time to pull over. I think they'll learn from it, and fix the issue. But somehow this is Obamas fault, Solyndra, Al Gore invented the internet and Global warming is a hoax.
Re: Tesla Loses Up To $3 Billion In Market Value After Video Of Burning Car Goes Vira I don't think this is something that will stop the progression of the electric car and I am amazed at how rapidly this area is finally developing. Having said that, I'll wait out this trial and error/development stage and hope they have a can-not-resist, quality assured electric car in 5-10 years from now.
Re: Tesla Loses Up To $3 Billion In Market Value After Video Of Burning Car Goes Vira Musk's reply is pretty compelling. http://www.teslamotors.com/blog/model-s-fire Would you feel safer if your laptop were powered by gasoline? Or your kid's ipod? Probably not. So why would anyone assume a battery-powered car is inherently less safe than a gas-powered one. The difference is we've had a hundred years of gas cars catching on fire, so it's not really news.
Re: Tesla Loses Up To $3 Billion In Market Value After Video Of Burning Car Goes Vira It might not change the general message, but those are cherry-picked statistics, so I wouldn't put TOO much faith in them.
Re: Tesla Loses Up To $3 Billion In Market Value After Video Of Burning Car Goes Vira How many of those vehicle fires were due to road debris striking the bottom of the car?
Re: Tesla Loses Up To $3 Billion In Market Value After Video Of Burning Car Goes Vira They rebounded positively today. Tesla issued a public statement to all owners and potentials that seemed to settle the nerve of investors.
