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 November 20, 2013
Tesla welcomes federal probe into Model S fires

 Federal traffic safety investigators said Tuesday that they will examine recent fires in Tesla Motors' electric Model S sedans, incidents that have taken a serious toll on the automaker's stock.

The move by the National Highway Traffic Safety Administration came after three Tesla sedans caught fire in six weeks. In each case, the flames erupted after a traffic accident punctured the car's large, rechargeable battery pack. The luxury electric sedan, built in Fremont, has won glowing reviews for both its performance and safety.

"The agency has opened a formal investigation to determine if a safety defect exists in certain Tesla Model S vehicles," the administration reported in an e-mailed statement. "The agency's investigation was prompted by recent incidents in Washington State and Tennessee that resulted in battery fires due to undercarriage strikes with roadway debris."

In an impassioned note posted Tuesday on Tesla's official blog, CEO Elon Musk wrote that the company requested the investigation to put to rest any doubts about the safety of the Model S or other electric vehicles. Cars powered by gasoline, he wrote, are far more likely to burst into flames following traffic accidents, often with deadly results.

'False perception'

"If a false perception about the safety of electric cars is allowed to linger, it will delay the advent of sustainable transport and increase the risk of global climate change, with potentially disastrous consequences worldwide," Musk wrote. "That cannot be allowed to happen."

The agency, however, insisted Tuesday that it made the decision to open the investigation on its own, alerting Tesla afterward.

"In regards to Tesla, the agency notified the automaker of its plans to open a formal investigation and requested their cooperation, which is standard agency practice for all investigations," the agency reported. "The automaker agreed to do so."

In his blog post, Musk defended the Model S as the safest car on the road. In the unlikely event that investigators find a design flaw, Tesla will incorporate any recommended changes into new cars and offer free retrofits to existing sedans, he wrote. Musk had previously ruled out a recall in response to the fires.

Musk also wrote on Tuesday that Tesla would amend its warranty to cover fire damage, even when the driver is at fault. And Tesla, which can reprogram its cars' software remotely, has already issued an update that will increase air suspension to give the Model S higher ground clearance at freeway speeds.

Three Model S sedans have caught fire since the start of October, two in the United States, one in Mexico. All three fires started in the car's large battery pack, located beneath the floorboards.

But none of the fires began spontaneously. Both of the U.S. incidents happened after drivers struck large pieces of metal debris lying on freeways. The debris managed to pierce a steel plate that shields the battery pack. The Model S fire in Mexico began after a driver sped through a roundabout, struck two walls and smashed into a tree.

In all three incidents, the drivers walked away unharmed. In the most recent fire, the flames were so completely contained within the car's front end that the driver was later able to retrieve papers and pens from the glove compartment.

'Troubling' incidents

"Three fires in five short weeks for the Model S is certainly troubling, although we'll wait until NHTSA has had the opportunity to run more rigorous tests before drawing any conclusions," said Alec Gutierrez, senior analyst at Kelley Blue Book. "While the fact that all three occupants involved in these incidents have walked away injury free is a testament to the safety and build quality of the Model S overall, it does appear as though sharp debris does pose at least some risk to the Model S when hit at highway speeds."

Fires are common in cars that run on gasoline, averaging roughly 17 per hour in the United States. They are often deadly, killing about four people per week, according to a study from the National Fire Protection Association.

Musk noted those lopsided statistics in his blog post, calling media coverage of the three Model S fires "disproportionate by several orders of magnitude." With more than 19,000 Model S sedans now on the road, Tesla drivers are statistically more likely to be struck by lightning than to experience a fire in their cars, he wrote. And battery packs, Musk wrote, pose far less fire risk in accidents than do tanks full of gas.

"It is also why arsonists tend to favor gasoline," he wrote. "Trying to set the side of a building on fire with a battery pack is far less effective."

Although many Wall Street analysts doubt the fires will do serious harm to Tesla, the incidents have hurt the company's stock. After nearing $200 per share in late September, Tesla's stock has tumbled, dropping 10 percent on Monday alone. It rebounded more than 3 percent Tuesday to close at $126.09.