Tesla reports third fire involving Model S electric car

Thu Nov 7, 2013 12:17pm EST
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By Ben Klayman and Bernie Woodall

DETROIT (Reuters) - Tesla Motor Inc's (TSLA.O: Quote) Model S electric car has suffered its third fire in six weeks, sending its shares down nearly 9 percent in Thursday midday trading.

The Tesla Motors Club website contains pictures and a story about another fire involving a Model S that a company spokeswoman confirmed. The accident occurred on Wednesday in Smyrna, Tennessee, where Nissan Motor Co (7201.T: Quote) makes the Leaf electric car.

While none of the drivers in any of the accidents were injured, the glaring headlines about fires was not welcome for Tesla.

"For a company with a stock price based as much or more on image than financials, those recurring headlines are highly damaging," Kelley Blue Book senior analyst Karl Brauer said.

Morgan Stanley analyst Adam Jonas said the risk of a formal investigation by U.S. safety regulators "could raise near-term concerns to a higher level in terms of cost, image and production disruption."

Tesla said it has been in touch with the driver, who was not injured. The vehicle was driven by Juris Shibayama, 38, of Murfreesboro, Tennessee, according to the highway patrol.

"Our team is on its way to Tennessee to learn more about what happened in the accident," Tesla spokeswoman Elizabeth Jarvis-Shean said in a statement. "We will provide more information when we're able to do so."

The company said the fire was the result of an accident and was not a spontaneous event.   Continued...

A Telsa Model S automobile destroyed by a fire is seen in a handout picture from the Tennessee Highway Patrol taken in Smyrna, Tennessee November 6, 2013. REUTERS/Tennessee Highway Patrol/Handout via Reuters