Tesla: Model S fire that rattled investors caused by accident

Tesla's plans to hike output and add new models increase execution risk that could weigh on the company's shares, an analyst warned Wednesday.
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(BLOOMBERG) -- Tesla Motors Inc. said a fire in one of its vehicles on Tuesday was caused by a crash.

The Model S "collided with a large metallic object in the middle of the road, causing significant damage to the vehicle," Palo Alto, Calif.-based Tesla said in an e-mailed statement Wednesday, after reports of the crash rattled some investors in the company.

Tesla shares fell 6.2 percent, or $12.05, to close at $180.95 in New York trading on Wednesday.

Earlier the shares tumbled as much as 9.1 percent after a picture of a Model S fire in Washington State was published by the Jalopnik Web site.

The drop was the biggest one-day slide in Tesla shares since July 16.

The driver exited the vehicle safely and called authorities.

A fire caused by damage sustained in the crash was contained, Tesla said.

The website had earlier said it couldn't provide a reason for the incident.

Tesla, which has seen its market value top $20 billion this year, is intent on becoming the world's most profitable seller of battery-powered autos, using technology designed in-house.

The company's plans to boost production and add new models increase execution risk that could weigh on the stock, Ben Kallo, a Robert W. Baird & Co. analyst, said Wednesday.

Kallo downgraded the company to neutral from outperform.

The electric-car maker is increasing output of its Model S sedan and plans to introduce a Model X SUV and "any hiccups in execution present stock-price risk in the near to intermediate term," Kallo wrote in a report.

The company plans this year to deliver 21,000 of its flagship Model S sedans, priced from about $70,000, and double that volume next year as sales in Europe and Asia expand.

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