Third Tesla Model S fire was pretty bad, but just how bad?

Tesla Model S Tennessee fireTesla Motors had its third Model S fire in six weeks on Wednesday, Nov. 6, near Smyrna, Tenn. It was at first a stunning blow to the upstart luxury, high-performance electric carmaker; it illustrated the difficulties of bringing a new technology to market and of succeeding in the auto industry. Since then, it may have quieted down. The driver of the third Model S fire has been defending Tesla, and the incidents’ stats are much better than the overall vehicle marketplace on the safety front.

The Tennessee Highway Patrol said that the 2013 Model S ran over a tow hitch on Interstate 24 that hit the undercarriage of the vehicle, causing an electric fire. Tesla doesn’t know yet whether the fire involved the electric car’s battery.

The driver, Dr. Juris Shibayama, was impressed with how it all turned out and plans to buy another one of Tesla’s electric vehicles.  “I am thankful to God that I was totally uninjured in any way from this impact. Had I not been in a Tesla, that object could have punched through the floor and caused me serious harm,” Shibayama wrote in a letter that was sent out in an email by Tesla.

The first of the three fires took place on October 1 in Kent, Wash, near Seattle. The Model S is said to have run over a piece of road debris described as a “curved section that fell off a semi-trailer.” Tesla said that it punched a three-inch hole through the quarter-inch-thick armor plate protecting the pack and had a force of 25 tons. The Model S alerted the driver, and he pulled over and safely exited the car. The second fire took place on October 18 in Mérida, a city in Mexico’s Yucatán region. A drunk driver jumped a curb in the Model S, took out part of a concrete wall and hit a tree. This driver was also satisfied with the safety of the car and wants to have his replacement Model S delivered promptly.

The National Highway Traffic Safety Administration (NHTSA) is in talks with Tesla on the Tennessee crash, and will decide soon if a full investigation is needed. Tesla did receive a top NHTSA safety rating for the Model S this year, and accolades also came in from Consumer Reports and car review publications. Thousands of cars crash and burn every year in the US – fires in Tesla’s electric cars are much less common than in those powered by gasoline and diesel; but timing does play a huge part in the stock price of a company and perceived value of a product. There have been over 19,000 units sold so far for the Model S; while it’s probably not a ratio that should raise red flags over the electric car’s safety, having these incidents happen so close together does create quite a perceptual challenge for the automaker.

Tesla Motors is now under a spotlight similar to what the Chevrolet Volt and Fisker Karma and its A123 lithium ion battery pack have been through. Li-ion batteries are commonplace in smartphones and laptops, but are still fairly new to cars. While Toyota and Daimler are impressed enough with Tesla’s battery-powered electric motor to place them in their own EVs, the new technology is quite vulnerable to safety and reliability issues.

This year has been a wild ride for the luxury electric carmaker. Tesla CEO Elon Musk has become a media icon, much to the chagrin of auto dealer trade groups, which have locked horns with Tesla in Texas and other states through lawsuits and lobbying efforts. Tesla has opened retail stores in states where franchise laws dictate car sales. Dealers are concerned that if Tesla wins this fight, automakers may bypass at least some of their dealer networks and go direct to consumers.

Musk has gained much attention through his SpaceX commercial space travel company, and the Hyperloop 800-mile per hour train system that he conceived with SpaceX engineers. Investors have also been quite enamored with Musk and Tesla shares, which have peaked and plummeted this year. In May, Tesla stock (TSLA) was at about $76 per share; it reached a peak of $193.37 in late September and closed on Monday, Nov. 11, at $144.70. So far, Tesla has been very shrewd about how it’s responded to the crashes, but the company is at a pivotal juncture for its future.

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