Here’s What Reignited Concern Over Tesla’s Model S Fire
Tesla’s (NASDAQ:TSLA) controversial Model S fire may have occurred more than three weeks ago, but now the sedan’s residual flames are causing the automaker’s shares to fall again, as the National Highway Traffic Safety Administration reported that it is in the process of investigating the fire.
Tesla shares were down 0.61 percent to $171.54 by the close in New York on Tuesday. The decline was spurred by a statement made by the NHTSA earlier that day, in which the agency explained that it is currently studying Tesla’s October 1 fire and will soon decide whether it wants to open a formal investigation.
According to Bloomberg, the NHTSA probe comes nearly 21 days after the initial electric car fire because most of the agency’s employees were on furlough during the partial U.S. government shutdown, keeping them from investigating earlier. Now, investor concern is reignited over what the officials might find.
Video of the Model S submerged in flames already whipped through the Internet earlier this month, after the sedan caught fire on Washington State Route in Kent, Washington, but CEO Elon Musk tried to curb the initial Tesla stock dive by meticulously explaining the unusual series of events that led to the blaze. Musk’s serious and poignant blog post published on the company website helped mitigate investor concern that the flames would cause consumer anxiety over the true safety of lithium ion battery-operated vehicles, but that apprehension was reportedly renewed Tuesday.
According to Bloomberg, a NHTSA administrator maintained early in the day that the agency is simply “gathering data” on the Tesla accident and may not even open an investigation. However, investors still remember the regulators’ probe of a fire in General Motors’s (NYSE:GM) Chevrolet Volt, which led to congressional hearings, and they’re already proceeding with caution.
It is not yet clear when the NHTSA will release its ruling on the Tesla fire, but considering that the probe is already three weeks after the fact, it’s likely to be soon.