Tesla stock goes down 6.2 percent on Wednesday after the report of Model S caught fire in an accident near Seattle. Tesla shares fell from $12.05 to close at $180.95. This is the biggest one-day decline of Tesla stock since July 16.
Tesla stock was on fire this Wednesday. The biggest decline in the company's shares was seen yesterday when fell from $12.05 to close at $180.95. Tesla sock dropped 6.2% in just one day. The main reason behind this biggest stock decline is its Model S sedan that caught fire in an accident near Seattle, Washington on Tuesday after 8 a.m. But the stocks started felling on Wednesday when video of this fiery crash was posted on YouTube. Also an automobile website Jalopnik has posted photos of this blazing Model S sedan.
Another reason is some negative analyst reports about Tesla S. One of the R.W. Baird analysts Ben Kallo downgraded the Tesla stock from "Outperform" to "Neutral," on Tuesday. He said, "We believe solid execution on both of these fronts is already priced into the stock, and any hiccups in execution present stock price risk in the near to immediate term."
Trooper Chris Webb of the Washington State Patrol told CNN that this fiery crash of Model S happened on Tuesday morning after 8 a.m. as the driver was traveling southbound on state Route 167., He said, "the driver stated that he believed he had struck some debris on the highway, triggering the fire, but a trooper who responded to the scene was unable to locate any objects on the roadway."
Tesla later issued a statement about this accident that hit its stocks badly. Tesla said, “Yesterday, a Model S collided with a large metallic object in the middle of the road, causing significant damage to the vehicle. The car’s alert system signaled a problem and instructed the driver to pull over safely, which he did. No one was injured, and the sole occupant had sufficient time to exit the vehicle safely and call the authorities. Subsequently, a fire caused by the substantial damage sustained during the collision was contained to the front of the vehicle thanks to the design and construction of the vehicle and battery pack. All indications are that the fire never entered the interior cabin of the car. It was extinguished on-site by the fire department.”
Tesla Model S electric battery is present on the floor of this fully electric car. Model S battery pack contains 16 modules. Tesla states that some metallic object directly hit one of the modules due to which the battery caught fire. A Tesla spokeswoman said, "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."