Tesla Motors, Inc.
) problems with car fire do not seem to end. Business Insider
reported that another Model S caught fire earlier this month
after the owner had parked it following a drive. The worrying
fact is that the car was neither charging nor hit by road debris,
as in the previous cases.
The latest incident occurred in a four-month old Model S in
Toronto. The cause of the fire is not known yet, although Tesla
revealed that it did not start off in the battery, the charging
system, the adapter or the electrical receptacle of the car.
Tesla is already undergoing a safety investigation by the
National Highway Traffic Safety Administration (NHTSA) related to
the previous fire incidents. In early October, the first Model S
electric vehicle caught fire near Seattle, WA.
This mishap was soon followed by a fire in another Model S car
in Merida, Mexico. The third Model S vehicle reportedly caught
fire on Nov 7, 2013 near Smyrna, TN, after the vehicle hit road
debris. The collision led to fire in the front portion of the
Thereafter, on Nov 15, 2013, a garage fire took place in
Irvine, CA while a Model S was being charged via a wall socket.
Tesla declared that the over-heating of the charging system was
not responsible for the fire.
Nevertheless, Tesla announced certain measures, including
software updates, an upgraded wall adapter and expansion of the
warranty coverage to increase safety and pacify investors and
prospective buyers. The company holds the record of not having
any deaths or permanent injuries to passengers in any of its
cars, during the six years that its cars have been in the
In fact, the German Federal Motor Transport Authority or
Kraftfahrt-Bundesamt (KBA) did not find any manufacturing defect
in Tesla's Model S during its investigation. However, a
government filing by the electric carmaker acknowledges that the
lithium ion battery cells used in the car have the risk of
catching fire or emitting smoke.
It is worth noting that the NHTSA recently reiterated the
five-star vehicle safety rating on Tesla's Model S car of model
year 2014. The car holds a five-star rating overall and also in
each of its subcategories.
CEO Elon Musk expects Model S to be cleared by the NHTSA. He
believes that the car is safe and hence, does not expect the
ongoing investigation to lead to a recall.
Tesla currently carries a Zacks Rank #1 (Strong Buy). Some
other stocks worth considering in the auto industry are
Geely Automobile Holdings Ltd.
Dongfeng Motor Group
), all of which carry a Zacks Rank #2 (Buy).
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TESLA MOTORS (TSLA): Free Stock Analysis
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