The crisis over two reported battery fires on its acclaimed Model S sedan comes at a difficult time for the company, which is trying to keep the momentum going after impressive sales, profitable quarters and a seesawing stock price this year. Instead of letting the probe simply unfold, CEO Elon Musk quickly fired off blog posts and tweets to defend the car and aggressively address the fire issue.
Brash as always, he wrote that Tesla has invited the National Highway Traffic Safety Administration to fully examine its cars. NHTSA shot back in a statement that it doesn't work by invitation. "NHTSA's decision to open any formal investigation is an independent process," the agency said, adding that it followed standard procedure.
The agency says it is looking at two incidents, one in Washington state and the other in Tennessee, in which "undercarriage strikes" of debris in the roadway resulted in fires. In each case, the occupants escaped unharmed, which Musk says is proof of the car's safety. Another Tesla Model S caught fire after a serious crash in Mexico. That driver, too, escaped unharmed.
"Since the Model S went into production mid last year, there have been over 400 deaths and 1,200 serious injuries in the United States alone due to gasoline car fires, compared to zero deaths and zero injuries due to Tesla fires anywhere in the world," Musk wrote on his blog.
But auto industry observers and safety experts question Musk's combative response. Karl Brauer, a senior analyst at auto pricing service Kelley Blue Book, says the three fires in Tesla are three more than have occurred with rival electric cars.
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"Is there a design flaw in Tesla'! s battery pack that makes it more prone to fires compared to other cars?" Brauer asks. "That's what NHTSA is determining."
Some question Musk's aggressiveness on the fire issue.
"They are acting as if this problem is going to put them out of business," says Clarence Ditlow, executive director for the Center for Auto Safety. He says Tesla needs to realize it has a problem and face it head-on. "The way to handle it isn't to stonewall, it's to recall."
While defending the vehicle, Musk announced that Tesla has already wirelessly sent orders to the computers of all Model S electric cars on the road to adjust the suspension so they ride higher on the highway and are less likely to take a hit from debris. He also says Tesla is extending its warranty to include fire damage.
Though unconventional, the tough stand is vintage Musk, always quick to defend his upstart operation based near Silicon Valley.The company walks a fine line between the worlds of technology and automaking.
Musk has a lot at stake. He has had Tesla on track to sell about 20,000 cars this year at prices starting at $70,000.
And though it's known to motorists for its breakthrough, long-range electric cars, the company has taken investors on a roller-coaster ride. After Tesla stock started the year at about $35, shares rocketed to a high of $194.50 before starting to settle, then cascaded due to the fires. On Tuesday, shares actually rallied in the face of the probe, rising $4.51, or 3.7%, to close at $126.09
Breaking into the hidebound auto industry is no easy task, so some find it almost refreshing to see an automaker that follows a different path.
"It's not like they act in traditional ways," says Ron Cogan, publisher of the Green Car Journal, which tracks environmentally sound vehicles. "They don't want to. They want to be known as being different."
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