Elon Musk, the CEO of
Tesla Motors, Inc.
), revealed in an interview with The Associated Press that he
expects Model S to be cleared by the National Highway Traffic
Safety Administration (NHTSA) in the ongoing fire-related
investigation. He believes that the car is safe and hence, does
not expect the investigation to result in a recall.
According to the CEO, a crash under similar circumstances in
other cars would likely have resulted in injuries to passengers.
However, the placement of the battery pack below the passenger
compartment in the Model S protected the occupants. Musk also
believes that the quarter-inch-thick heat-treated aluminum shield
covering the battery pack is adequate to protect the car battery
and Tesla's engineers are not working toward its enhancement.
Alongside the affirmation of his confidence in the safety
standards of the car, Musk also said that the car owners are
financially safe from the impact of the fires now that Tesla has
added fire coverage to its warranty. Further, he revealed that
sales of Model S have surpassed expectations so far this quarter.
Investors were earlier concerned that the recent fires might
affect car sales.
Last week, Musk announced certain measures that are being
implemented by the automaker in the light of the recent Model S
fires and the consequential negative media coverage. The company
provided a wireless update to increase the ground clearance of
Model S during high-speed driving.
Additionally, Tesla expanded the warranty coverage to include
any fire damage, even if it is the driver's mistake. The company
also requested the NHTSA to investigate the recent Model S fire
Meanwhile, the NHTSA announced that it will start
investigating the Model S fires. However, the agency revealed
that the investigation was not being conducted in response to
Tesla currently retains a Zacks Rank #3 (Hold). Other major
automobile stocks worth considering are
General Motors Company
Ford Motor Co.
). While Ford carries a Zacks Rank #1 (Strong Buy), General
Motors and Daimler are Zacks Rank #2 (Buy) stocks.
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