Tesla fire: 3rd Model S crashes, burns. Tesla Motors (TSLA) stock follows suit.

Tesla Motors (TSLA) had avoided major battery complications until this fall, when three Model S cars crashed and their batteries caught fire. Tesla Motors officials are scrambling to assure investors and the public that these Tesla fires are not spontaneous eruptions that have plagued other battery-powered vehicles. 

By , Staff writer

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    The Tesla Motors (TSLA) Model S electric car is shown in Boston. The company is scrambling to explain three Tesla fires in the past five weeks, which have helped send its stock sliding.
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Three Tesla Motors (TSLA) Model S electric cars have caught fire after crashing in the past five weeks. It's an electric car company's worst public-relations nightmare.

The advanced lithium-ion batteries used in modern electric cars are prone to overheating, and early generations suffered high-profile fiery battery incidents that didn't help electric carmakers make their case to the driving public. 

Up until a little over a month ago, Tesla Motors' Model S had avoided major battery complications. But now the Palo Alto, Calif., company has three battery fires on its hands, and is scrambling to assure investors and the public that these fires are isolated incidents resulting from collisions – not the spontaneous eruptions caused by overheating. 

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"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," Tesla Motors Chief Executive Elon Musk wrote in a blog post after the first fire last month. 

Shares of Tesla stock were down 7 percent to $142.04 in afternoon trading Thursday, after reports of the third Model S fire emerged. That's after sinking 14.5 percent Wednesday, triggering a "circuit breaker" on the Nasdaq exchange after its third-quarter sales didn't meet analysts' expectations. Limited battery supplies hampered sales. 

The third fire took place Wednesday near Smyrna, Tenn., after a crash. Tesla has said the fire was caused by an accident and is investigating further.

“We have been in contact with the driver, who was not injured and believes the car saved his life," Liz Jarvis-Sheen. a Tesla spokeswoman, said in an e-mailed statement. "Our team is on its way to Tennessee to learn more about what happened in the accident. We will provide more information when we’re able to do so.”

The previous fires took place in Seattle and Merida, Mexico. No one has been reported seriously injured in any of the incidents. The National Highway Traffic Safety Administration (NHTSA) reviewed the first incident, but found no reason to perform a full investigation at the time.

Tesla cites added protective casing and ventilation around the energy-dense batteries as reason for its superior safety record. The Model S ranked among the safest cars on the road in NHTSA testing.

Americans drive an estimated 3 trillion miles per year according to the Department of Transportation. US fire departments responded to an estimated average of 152,300 automobile fires per year between 2006 and 2010, according to the National Fire Protection Association. Those fires caused an average of 209 civilian fatalities.  

There are 19,000 Model S drivers worldwide, according to Tesla Motors, and they have driven a total of more than 100 million miles. Three fires have been reported to date. Tesla Motors says it knows of no fatalities ever stemming from an accident involving a Model S.

In his blog post last month, written after the first fire, Mr. Musk crunched the numbers. Updating those, it would suggest that on average one car catches fire every 20 million miles; for Tesla, it works out to one fire for every 33 million miles.

So the Tesla Model S is safer, but the averages are beginning to catch up with the new automaker.

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