Over the last 12 months or so it has all been good news for Tesla Motors, but the last couple of months have been something of a hiccup. The Tennessee Highway Patrol today confirmed that a third fire involving a Tesla Model S electric car was reported today. The exact details of the incident are as yet unknown, although it is believed that the vehicle ran over a tour hitch on Wednesday which seems to have caused an electric fire with "extensive damage".
The initial reaction by investors was to mark down Tesla shares by around 9% although the company has yet to confirm what has actually occurred. There is speculation that the three vehicle fires are in some way connected to the armoured plating under the car which protects the array of lithium ion batteries. It may take some time to get to the bottom of the problem and it may well be the company introduces some design changes but time will tell.
A knock for consumer confidence
At a time when the electric car market, especially in the U.S., was most certainly riding high, this will potentially stall the industry in the short term. While there is no doubt there is an issue to resolve regarding the three fires in six weeks it is worth noting that traditional gasoline/petrol vehicles are recalled on a regular basis, sometimes for far greater alleged defaults.
Quote from ElectricForum.com : "Tesla has given its strongest hint yet that within 4 years the company will have a $30,000 EV available with a 200+ mile journey capacity."
Those who have attempted to pull down the electric vehicle industry will no doubt make hay while the sun shines, but it would be wrong to suggest the industry is flawed. The simple fact is that no fuel supply is 100% safe and there are risks whether we are looking at gasoline/petrol, electric, or even hydrogen powered vehicles. So those who suggest this is an issue which is confined to the electric vehicle sector are not giving a fair reflection of the situation.
The future for Tesla
When you bear in mind the Tesla share price has performed phenomenally over the last couple of years it is perhaps disappointing to see the 27% fall over the last six weeks, since the first fire was reported. The company has sent a team of experts to each of the drivers involved, none of whom were injured, and an official report will no doubt be made public in due course. It seems almost inevitable that the authorities will require an explanation for these surprising fires and try to understand how the company intends to tackle the issue.
There are many who will now sit back and write off Elon Musk and his groundbreaking technology but the fact is he has been in far tighter corners than this and always comes out fighting. Those who write off the chief executive officer of Tesla Motors do so at their own risk and join a group of people who have tried before only to end up on the scrapheap. The fact that Tesla's reputation is based upon public confidence means the company will need to be open and forthright with regards to its ongoing investigations, therefore avoiding an information vacuum which would allow rumours, mistruths and scandalous suggestions to breed.