Shares of electric car company Tesla sank more than 6 percent on Wednesday after an Internet video showed flames spewing from one of the company’s vehicles near Seattle.
Shares of Tesla Motors Inc fell US$12.05 to US$180.95 — the stock’s biggest one-day decline since July 16.
The incident happened on Tuesday after 8am as the driver was traveling southbound on state Route 167 through Kent, Washington State Patrol Trooper Chris Webb said. The driver stated that he believed he had struck some metal debris on the freeway, so he exited the highway and the vehicle became disabled.
The driver told authorities he began to smell something burning and then the vehicle caught fire. Firefighters needed several attempts to extinguish the flames because the blaze kept reigniting, Webb said.
A trooper who responded to the scene was unable to locate any objects on the roadway, but Department of Transportation workers did observe some debris near the scene.
Webb said there was too much damage from the fire to see what damage the debris may have caused.
The automobile Web site Jalopnik.com posted photos of the blaze that it says were taken by a reader, along with a video. The video shows the front of the Tesla Model S in flames.
Tesla said the flames were contained to the front of the US$70,000 vehicle due to its design and construction. Company spokeswoman Liz Jarvis-Shean said there were no indications that the fire was caused by anything other than the crash.
“This was not a spontaneous event,” she said. “Every indication we have at this point is that the fire was a result of the collision and the damage sustained through that.”
Shares of Palo Alto, California-based Tesla have risen more than 400 percent since the start of the year. However, investors likely were alarmed, with some selling their shares, out of fear that the fire could be an indication of a flaw in the company’s battery packs.
The company’s battery system and the Model S itself have received rave reviews, including a top crash-test score from the US National Highway Traffic Safety Administration and a tie for the highest auto test score ever recorded by Consumer Reports magazine.
After getting the top crash test score, Tesla touted the Model S as being “the safest car in America.”
The car’s liquid-cooled 85 kilowatt-hour battery, mounted below the passenger compartment floor, uses lithium-ion chemistry similar to batteries that power laptop computers and mobile phones. Millions of such rechargeable batteries were recalled in 2006 and 2007 after it was discovered they could overheat and ignite.
Battery fires broke out in three Chevrolet Volt plug-in hybrid cars after crash-testing two years ago, but officials from General Motors Co and the US government believe the fires were caused by coolant leaking from damaged plastic casing around the batteries.