When debris on a Seattle-area freeway pierced the battery of a $70,000-plus Tesla Model S and touched off a raging fire, it raised new safety concerns for electric-vehicle owners.
It also caused jitters among investors, who of late have viewed Tesla as nearly invincible.
Electric vehicles have scored well in government tests of front and side crashes – the Model S earned the highest score possible. But Tuesday’s incident demonstrates that real-world driving could reveal some vulnerabilities that don’t show up in laboratory testing.
“The safety challenges related to electric cars are still in the early stages of being tested and addressed,” said Karl Brauer, senior analyst at Kelley Blue Book.
Tesla said the Seattle-area driver hit a large metal object in the road, which damaged a battery cell and caused a fire. The company said the car acted as designed by containing the blaze in the front of the car.
Still, experts said Thursday that while incidents like this will happen again, they are rare. And electric cars still are safer than those with gasoline engines that haul around a tank full of flammable petroleum.
The Tesla fire also shows that automakers need to bolster the shields around batteries, and that firefighters need more training to deal with electric car blazes.
Of the estimated 194,000 vehicle fires in the United States each year, the vast majority are in cars and trucks with gasoline or diesel engines. Electric vehicles make up less than 1 percent of the cars sold in the United States.
Tesla says this is the only fire ever to happen in one of its batteries. Although a Chevrolet Volt made by General Motors caught fire two years ago after a government crash test, neither GM nor Nissan, which make the top-selling electric cars in the nation, know of any real-world blazes in their vehicles.
“If you think about what you’d rather be close to, 10 gallons of gasoline or a battery pack, I’d pick the battery pack every day,” said Giorgio Rizzoni, director of the Center for Automotive Research at Ohio State University, where he is a professor of mechanical and electrical engineering.
Still, an Internet video of the Tesla fire spooked investors and caused a sell-off Wednesday and Thursday. Tesla shares fell 6 percent Wednesday, and they closed Thursday down $7.64, or 4.2 percent, at $173.31.
At that price, Tesla’s market value has dropped about $2.4 billion in the past two days. Still, if an investor purchased a share of Tesla at $35 on Jan. 2, they’re sitting on a gain of nearly 400 percent. Tesla has dazzled Wall Street by selling more vehicles than expected and posting its first quarterly net profit earlier this year.
Deutsche Bank analyst Dan Galves, in a note to investors Thursday, said he expects bad news and investor concern to push down Tesla shares in the short-term. Investors, he said, will be concerned because electric cars represent a new technology with a high sensitivity to safety risks. He still thinks Tesla shares will reach $200.