Tesla Motors Inc (NASDAQ:TSLA) stock tumbled more than 6 percent Wednesday after an Internet video showed one of Tesla cars blazing in fire near Seattle. The stocks of the company dropped $12.05 to $180.95, which is the biggest decline since July 16th.
Metal Debris might be the cause
On Tuesday, around 8 a.m. a driver was travelling in south on state route 167 through Kent according to Trooper Chris Webb of the Washington State Patrol. The driver said that he doubted of hitting some metal debris on the way, so he left the highway, and the vehicle got disabled.
Later, he sensed a burning smell and vehicle turned ablaze. It took multiple attempts from the fire workers to set off the fire because the flames kept on blazing, according to Webb. The trooper could not find any metal object on the highway, but Department of Transportation workers did confirmed that there was some debris near the scene.
Jalopnik.com, an automobile site, published a photo of the vehicle, which was clicked by a reader. Photos were, in addition to videos that showed, the front of Model S caught in flames.
Investors got worried
Tesla Motors shares surge over 400 percent since the start of the year. But Investors were caught in doubt when fire caught the car, and some of them even started shedding their stocks expecting that the fire would be the outcome of defect in the company’s battery packs.
R.W. Baird analyst Ben Kallo downgraded Tesla from “Outperform” to “Neutral,” which is a rare downgrade for the electric car maker, further fuelling the sell-offs by investors.
Safest car in America
Tesla Motors issued a statement saying that car was damaged majorly by the debris that hit the car, and the flames were restricted to the front of the Model S due to its design and construction.
“All indications are that the fire never entered the interior cabin of the car. It was extinguished on-site by the Fire Department,” the statement said.
Models S along with its battery has received good reviews including a top crash-test score from the National Highway Traffic Safety Administration, and the highest auto test scorer ever by a consumer reports magazine.
After such praises, Palo Alto, Calif based company claimed the Model S to be the safest car in America. Battery of the car is liquid-cooled 85 kilowatt-hour specific, which is fitted below passenger compartment floor.