Tesla CEO Defends Model S After Video of Fire Hits Stock

(San Jose Mercury News/MCT) -

For the second time this year, Tesla Motors Inc. CEO Elon Musk has come out swinging.

In the same week that a video of a Model S on fire went viral, pulling the company’s share price down sharply for two days, Musk on Friday took to the internet to defend his electric sedan. Investors were heartened by Musk’s post, which claimed Tesla vehicles are far less fire-prone than gas-powered cars, and the company’s stock rebounded more than 4 percent Friday.

Coming to the defense of his fledgling electric-car startup is becoming something of a routine for Musk, who last February assailed The New York Times for what he said was a false story claiming the Model S falters in cold weather. Back then, as it did this week, the company’s stock took a big hit from the negative news. Musk attacked the Times’s reporting, calling its finding “fake,” while the Times fired back, saying his allegation was “flatly untrue.”

The video of Tuesday’s fire on a Washington state highway spread quickly around the web. After Tesla’s high-flying shares plummeted 6 percent Wednesday and more than 4 percent Thursday, Musk launched a personal campaign of damage control. The CEO blogged that this was the first fire to hit one of his company’s sedans, while gas-powered car fires are relatively common.

“There are 150,000 car fires per year according to the National Fire Protection Association, and Americans drive about 3 trillion miles per year, according to the Department of Transportation,” Musk wrote. “That equates to 1 vehicle fire for every 20 million miles driven, compared to 1 fire in over 100 million miles for Tesla.”

The blog post also went into great detail on the incident that sparked the fire, explaining that a large metal object, believed to be part of a large truck, struck the bottom of the Model S with unusual force that pierced the armor plate protecting the car’s battery pack. Musk also stressed that the safeguards in the battery pack kept the fire from spreading to the passenger enclosure.

“Had a conventional gasoline car encountered the same object on the highway, the result could have been far worse,” the CEO wrote in his blog. “A typical gasoline car only has a thin metal sheet protecting the underbody, leaving it vulnerable to destruction of the fuel supply lines or fuel tank, which causes a pool of gasoline to form and often burn the entire car to the ground.”

Musk’s blog post included an email from Robert Carlson, the owner of the Model S that caught fire. Carlson seems to downplay the entire incident, which he suggested looked a lot worse in the internet version than it did in reality.

“The batteries went through a controlled burn, which the Internet images really (exaggerate),” Carlson wrote. “Anyway, I am still a big fan of your car and look forward to getting back into one. I am also an investor and have to say that the response I am observing is really supportive of the future for electric vehicles.”

Tesla’s Model S has been the most important factor in the company’s booming Wall Street success in 2013, with successful sales allowing Musk to announce its first profitable quarter and pay off the federal government’s loan much earlier than expected.

Shares resumed their upward trajectory Friday, gaining 4.4 percent to $180.98.