Elon Musk and Tesla Fight Back After Feds Probe Model S
What will happen to Elon Musk, now that the feds are investigating his Model S?
Nov. 19, 2013 — -- Now that the NHTSA said it is formally investigating two U.S. Tesla fires in a span of six weeks, founder Elon Musk is fighting back in his trademark combative style.
Musk says he's used to bumps in the road with his projects, and for those bumps to get a lot of attention.
Musk, in his blog, said: "Since the Model S went into production last year, there have been more than a quarter million gasoline car fires in the United States alone, resulting in over 400 deaths and approximately 1,200 serious injuries (extrapolating 2012 NFPA data). However, the three Model S fires, which only occurred after very high-speed collisions and caused no serious injuries or deaths, received more national headlines than all 250,000+ gasoline fires combined."
The headlines, he says, suggest "that the Tesla Model S and perhaps electric cars in general have a greater propensity to catch fire than gasoline cars when nothing could be further from the truth."
He concludes: "You are more than four and a half times more likely to experience a fire in a gasoline car than a Model S! Considering the odds in the absolute, you are more likely to be struck by lightning in your lifetime than experience even a non-injurious fire in a Tesla."
David Whiston, U.S. autos senior analyst with Morningstar who doesn't cover Tesla, said NHTSA's investigation could produce a variety of outcomes. On one end, NHTSA could say there is no inherent flaw in the vehicle. In the middle, the agency could determine the company needs to make a tweak to the production process. Or the agency could levy a fine and force a recall.
"Generally, it's nothing to panic about but it's nothing to be ignored either," Whiston said.
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Karl Brauer, senior director of insights at Kelley Blue Book, said Musk and Tesla's response to the NHTSA investigation will be crucial for its public relations.
"I would say there's no doubt that because it's Tesla and Elon Musk the news is getting more of a focus, but there's also the fact that this is a new type of transportation as an electric car. I would further throw out they've sold a lot of less-expensive Nissan Leafs. I don't know of any fires at all [with the Nissans]."
Jamie Albertine, an analyst at Stifel, Nicolaus & Co., said he thought the NHTSA inquiries "were a likely outcome" given increasing customer complaints on the NHTSA site and vehicle fires reported.
He said it's "worth noting, however, that inquiries and even recalls are not uncommon among global manufacturers."
"The Model S remains one of the safest vehicles on the road by NHTSA testing standards," Albertine said.
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