Tesla Takes A Hit After One Of Their Cars Goes Up In Flames

By Joelle Renstrom | Updated

Elon Musk, CEO of SpaceX, Paypal, and the brains behind the potentially revolutionary Hyperloop transport system, has managed to achieve god-like status among science and tech geeks. Just when he seemed untouchable, an incident involving his Tesla Motor Company’s Model S electric car made headlines this week and caused the company’s stock to plummet.

On Wednesday, a Seattle-area driver got into an accident that caused the Model S to go up in flames. Apparently, a piece of metal fell off a semi, hitting the car, puncturing its armor plate, and damaging the battery pack. The blaze started in the lithium-ion battery compartment and, according to Musk, remained contained and safely away from the passenger compartment. An alarm system in the car prompted the driver to pull over, and he was apparently out of the car before the fire began. The fire department extinguished the flames, which restarted a short time later under the car. Oops. That might be because water wasn’t effective as an extinguisher—when firefighters used chemicals on the flames, they were able to put it out for good.

Musk, who’s never shy about taking to the Internet to speak his mind, assured readers, fans, and potential customers that the car is in fact safe, and that it requires some 25 tons of force to puncture the Model S armor. He also took the opportunity to remind the public that batteries are a lot less flammable than gasoline—a fair point, despite the flames. The National Traffic Safety Administration gave the Model S a 5-star safety rating in every single category, and Consumer Reports agreed. At the time, the Model S was touted as the “safest car ever produced.” Didn’t anyone ever tell these guys to avoid superlatives? Talk about a jinx.

Despite the initial raves about the design and safety, the Center for Auto Safety is now looking into a possible design flaw with Tesla’s battery, concerned about the possibility that objects under the car could continue to cause serious problems. The accident, coupled with doubts about lithium-ion batteries, doesn’t bode well for the company.

Tesla’s stock slumped last week, down about 10% between Wednesday and Thursday, though Musk’s published statement seemed to provide a 0.5% boost just before trading ended on Wednesday. All in all, experts believe Tesla’s market value dropped about $3 billion over those two days. Shares of Tesla stock are still up 434% for the year, so it seems Musk and his company will be okay, so long as no other accidents or scandals fan these flames. Meanwhile, we can convince ourselves that the most important aspect of the Model S is that it can beat a Corvette in a road race.