Tesla stock drops after Model S fire, negative analyst reports

Tesla's stock was hit by a bad analyst report and a fiery crash in Seattle.
Posted By VERONICA LINARES, UPI.com   |  Oct. 3, 2013 at 7:56 AM
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Tesla's stock dropped 6 percent Wednesday following a negative analyst report and a crash that led to a fire of one of the company's Model S sedans.

The drop began Tuesday after Stock analysts at Baird downgraded the stock to "neutral."

Later, on Wednesday, auto Web site Jalopnik.com posted photographs showing a Tesla Model S on fire near Seattle, Washington.

Tesla addressed the issue Thursday in a statement describing what happened.

"Yesterday, a Model S collided with a large metallic object in the middle of the road, causing significant damage to the vehicle," the statement read.

Tesla explained that automatic alerts warned the driver to pull over and that the fire only began after the driver was out of the vehicle.

"All indications are that the fire never entered the interior cabin of the car," Tesla said in its statement. "It was extinguished on-site by the fire department."

The fire went on to consume much of the vehicle's front end.

The Model S, a fully electric car, has its battery pack installed in the floor of the vehicle. Tesla explained that the fire started when the metallic object directly hit one of the 16 modules in the battery pack.

"Because each module within the battery pack is, by design, isolated by fire barriers to limit any potential damage, the fire in the battery pack was contained to a small section in the front of the vehicle," a spokeswoman said.

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