The Tesla Motors Model S, the luxury electric sedan marketed as the "The Safest Car In America," has become the subject of a federal safety investigation after three of the cars suffered battery fires in six weeks.
In response to the fires, Tesla's CEO Elon Musk said he had decided to ask the National Highway Traffic Safety Administration (NHTSA) to open an investigation into their cause. NHTSA, however, said Tuesday it decided to open the inquiry independently.
At the time of the first fire, Mr. Musk provided detailed information on his Tesla website blog, reframing the incident as an indication of the cars' advanced safety mechanisms.
"Earlier this week, a Model S traveling at highway speed struck a large metal object, causing significant damage to the vehicle," Musk wrote on Oct. 4. "A curved section that fell off a semi-trailer was recovered from the roadway near where the accident occurred and, according to the road crew that was on the scene, appears to be the culprit. The geometry of the object caused a powerful lever action as it went under the car, punching upward and impaling the Model S with a peak force on the order of 25 tons. Only a force of this magnitude would be strong enough to punch a 3 inch diameter hole through the quarter inch armor plate protecting the base of the vehicle," Musk wrote.
"The Model S owner was nonetheless able to exit the highway as instructed by the onboard alert system, bring the car to a stop, and depart the vehicle without injury," he continued. "A fire caused by the impact began in the front battery module – the battery pack has a total of 16 modules – but 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... At no point did fire enter the passenger compartment."
According to data presented on Bloomberg Television, the two fires reported among the 19,000 Model S cars that have taken to US roads since last year have occurred at a tenth of the rate as the 250,000 vehicle fires among the 254.3 million cars on the road during the same period. Since the release of the Tesla Model S, some 400 people have died in vehicle fires, none while riding in a Tesla. The National Fire Protection Association provides more details on U.S. auto fires.
On his company's blog, Mr. Musk had hard words Monday for the "onslaught of popular and financial media seeking to make a sensation out of something that a simple Google search would reveal to be false."
Because of the perception created by those reports, he announced, Tesla had requested the NHTSA investigation of the Model S, which received the agency's highest safety rating in August.
"Given that the incidence of fires in the Model S is far lower than combustion cars and that there have been no resulting injuries, this did not at first seem like a good use of NHTSA’s time compared to the hundreds of gasoline fire deaths per year that warrant their attention," wrote Musk. "However, there is a larger issue at stake: if a false perception about the safety of electric cars is allowed to linger, it will delay the advent of sustainable transport and increase the risk of global climate change, with potentially disastrous consequences worldwide. That cannot be allowed to happen."
But NHTSA, which announced its investigation Tuesday morning, later told the L.A. Times it had decided to open an investigation independently. “In regards to Tesla, the agency notified the automaker of its plans to open a formal investigation and requested their cooperation," the agency said, "which is standard agency practice for all investigations.” The investigation will focus on the two US fires, which occurred in Washington and Tennessee; the fire in Mexico is outside its jurisdiction.
Musk also announced plans to amend the warranty on the Model S to cover fire damage, and to update the car's suspension system, allowing it greater ground clearance at highway speeds. "To be clear," he emphasized, "this is about reducing the chances of underbody impact damage, not improving safety. The theoretical probability of a fire injury is already vanishingly small and the actual number to date is zero." Last week he clarified that there would "definitely" be no recall of the Model S, reports SFGate.
Telsa's stock prices, which shot upward after the June 2013 release of the Model S, had reached $194.50 per share on Sept. 30, the day before the first fire was reported in Washington. Stock prices began a slow crawl downward after that fire, and abruptly dropped again after the second US fire was reported in Tennessee, closing 25 points lower on Nov. 6, at $151.16, than it had the day before.
The stock dropped again after NHTSA's announcement Tuesday, but rebounded by midday, hovering near $126. According to USA Today, investors had "quickly decided it was an overreaction and began bidding up the price." Other news outlets have been floating the idea that Tesla's tumble may provide a perfect opportunity to buy a piece of the company. "With Tesla Motors shares plunging, is it time to start buying stock?" asked an L.A. Times headline on Nov. 8.
According to the Times, investors don't usually pay much attention to the 150,000 car fires that occur annually in the US. "However, safety officials have been tracking fires in electric cars, as well as computers and other equipment, out of concern that the lithium-ion battery systems might be fire-prone," the paper reported.
The New York Times reports that a NHTSA defect investigation may include crash tests, and take months to complete. If a defect is found that poses a safety risk, the government could order a company recall and structural changes, and impose fines if the company fails to address the problems.