Tesla Motors Shares Dip After Fiery Model S Crash

International Business Times

Published Jul 08, 2014 11:09AM ET

Updated Jul 08, 2014 02:59PM ET

Tesla Motors Shares Dip After Fiery Model S Crash

By Maria Gallucci - Tesla Motor Inc. NASDAQ:TSLA’s shares are down after a fiery crash involving a stolen Model S raised safety concerns about the lithium-ion batteries in electric cars.

Investors bid down Tesla shares by 2.9 percent to $222.66 on Monday, just days after a man stole the electric sedan from a Tesla store in Los Angeles, led police on a high-speed chase and then slammed into several cars and a pole, the Wall Street Journal reported. Seven people were injured but no deaths were reported in the July 4 accident that split the vehicle in half.

The smashed sedan sprayed chunks of the car’s lithium-ion batteries around the street. Some of the pieces burst into flames and shot sparks through the air like fireworks, the WSJ noted, citing a broadcast report by television station KTLA-TV.

The Los Angeles crash marks the fourth time a Tesla car has ended up burning following the collision. The California-based carmaker’s stock dropped nearly 14 percent early last October after Model S struck debris on a highway south of Seattle and caught on fire. Two weeks later, shares took another hit after a Model S slammed into a concrete barrier and a tree in Mexico.

Car fires are relatively common among gasoline-powered vehicles in the United States, but accidents involving electric vehicles garner extra attention because the battery packs are becoming powerful enough to raise concerns over lithium-ion chemical fire risk. Tesla CEO Elon Musk has criticized what he said is disproportionate media coverage of a handful of Model S fires. About 65,000 car fires occurred each year from 2008 to 2010, almost all of which involved conventional vehicles, according to a study by the U.S. Fire Administration.