
Tesla stock tumbles after Model S catches fire - rglovejoy
http://news.yahoo.com/tesla-stock-tumbles-model-catches-fire-210456370--finance.html
======
marvin
It's been confirmed that this was actually a fire in the battery pack (one of
the 16 cells of the pack). However, the fire did not start spontaneously - it
was caused by the driver hitting a large piece of metal debris in the road.
The fire was also contained to part of the battery pack and did not cause a
runaway reaction like in some laptop battery fires. The driver was alerted by
the computer system and could stop the vehicle in a controlled manner, and
evacuate. There was no explosion, and the fire did not spread to the interior
of the vehicle. The fire department was able to put out the fire with a single
truck.

All in all, I think this is actually a positive mark on the engineering of the
Tesla Model S. Statistically, there have been fewer fatalities with Model S
than the average for the number of miles driven - this is in line with the
car's crash test ratings. This is also the first fire after the 12 crashes
which have been recorded. A fire like this was inevitable; gasoline cars also
occasionally catch fire when they crash. The energy content of a full gas tank
is also a lot higher.

However, investors are very fickle when it comes to Li-ion battery pack fires.
Even if this is evidence that the Model S is probably safer with regards to
fires than a traditional gasoline car, naywayers will jump on it. Not a fun
day to be a Tesla shareholder :P

~~~
symfoniq
Moreover, when this sort of thing happens to a car that uses gasoline, the
results can be far more catastrophic.

"The freak accident occurred about 10:30 a.m. on Nov. 8, 1994, when the family
was traveling to Wisconsin to celebrate birthdays. The van, driven by Scott
Willis and carrying his wife and six of their nine children, struck a piece of
debris that had fallen off a truck driven by Ricardo Guzman. The debris, a
mudflap/taillight assembly, punctured the mini-van's gas tank, and the car
burst into flames.

Scott and Janet Willis managed to untangle themselves and escape, but the
children were trapped and five of the six perished instantly. The oldest in
the car, 12-year-old Ben, died the next day."

[http://articles.chicagotribune.com/2000-05-01/news/000501016...](http://articles.chicagotribune.com/2000-05-01/news/0005010161_1_willis-
family-rev-duane-scott-willis-accident)

~~~
ofthecaribbean
This is _possible_ with a gas car, but the gas tank doesn't occupy the whole
bottom of the car and even if it is punctured, it won't ignite unless there is
some additional spark or heat source.

Given the number of gas cars on the road, anything described as a "freak
accident" must have a very low probability. If this is the 13th serious
accident of a Tesla, it's unlikely that the probability is very low.

~~~
samman
>If this is the 13th serious accident of a Tesla, it's unlikely that the
probability is very low.

I'm not sure you've followed the thread here...I don't think anyone's
(accurately) saying that this is the 13th spontaneous battery accident. I'm
pretty sure the other 12 are standard traffic accidents, of which this is the
_first_ to produce a battery fire. All in all, it seems a rather small sample
size to make any kind of determination.

~~~
tedunangst
Assuming that the normal rate of battery fires after collisions is one per
million, the probability of observing such a fire after only 13 collisions is
rather low. (Not impossible, just unlikely.) so perhaps the rate is not one
per million. Doesn't mean it's one in thirteen, just not one in a million.

~~~
286c8cb04bda
If the chance of a catastrophic event happening is one-in-a-million, then it
is equally likely to happen on the 13th and on the millionth coin toss.

 _> Assuming that the normal rate of battery fires after collisions is one per
million, the probability of observing such a fire after only 13 collisions is
rather low._

What you're arguing is that the probability of it happening on or before the
13th time is less than it happening on or before the millionth time -- Which
is self-evidently true of _any_ probability, and is a much weaker argument.

 _> perhaps the rate is not one per million_

This is much closer to the argument you should be making. I.e. "Given that a
purported one-in-a-million event occurred after only the 13th test, what is
the probability that their estimate of one-in-a-million is accurate?"

(I don't know the math to answer that question, but I hope somebody that does
will come along and chime in.)

~~~
chimeracoder
Time for some fun with binomial probabilities!

Assuming I interpret the actual problem at hand correctly, this is how we
formulate it statistically.

We have an event that occurs with probability _p_ = 1/1000000, _given_ an
accident (of which there were 13).

The probability of having zero catastrophic events, _given_ that we have
observed 13 accidents, is (1-p)^13 = .99987

(For some real hair-raising fun, try this calculation with the success/failure
rate of a typical condom.)

Note that this is a purely frequentist interpretation and ignores any Bayesian
inference (ie, we assigning a weight of 0 to our Bayesian prior, which is
atypical). It's not a very robust way of modeling the situation, for a number
of reasons.

~~~
tedunangst
I think the right test to apply is the Wilson test.

------
MtotheThird
The fire has little to do with it. The stock is down because earlier this week
it was priced at 100x Tesla's earning estimates for next year, and implies a
30x growth in sales by 2020.

Simply put, while Tesla's fundamentals are strong, there's a bubble in the
stock. Retail investors (e.g. us) have been excitedly buying it without taking
a careful look at the stock, and several institutional investors have decided
it's a good time to sell and reap the rewards (i.e. fleece the excitable
retail investors).

Here's a CNN Money article about Bank of America's sudden bearward turn on
Tesla: [http://money.cnn.com/2013/10/01/investing/tesla-
investors/in...](http://money.cnn.com/2013/10/01/investing/tesla-
investors/index.html)

The Baird Capital report is a little more nuanced; it boils down to "Tesla
have been kicking ass, and that's already priced into stock, so don't buy it
now because everyone else is buying it":
[http://www.forbes.com/sites/chuckjones/2013/10/02/tesla-
down...](http://www.forbes.com/sites/chuckjones/2013/10/02/tesla-downgraded-
by-baird-since-stock-reflects-flawless-execution/)

Anyway, yes, this isn't anything wrong with Tesla, it's just a natural market
correction.

~~~
Tloewald
When a stock is out of whack with its fundamentals, bad news is
disproportionately likely to hurt, so it probably has a good deal to do with
the fire.

------
SuperChihuahua
To quote Ian Wright (co-founder of Tesla) "There have been five laptop fires
so far, and it's front-page news. There are 750 gas-car fires each day, but
that's not news."

Here's a picture of a SUV on the top of a Tesla Roadster, and it didn't begin
to burn

[http://www.flickr.com/photos/16822508@N05/3995784846/sizes/l...](http://www.flickr.com/photos/16822508@N05/3995784846/sizes/l/)

~~~
freehunter
I'd love to know the story behind that. It looks like the SUV hit head-on due
to the positioning of the SUV and the damage to the front-end, but the rear-
end is also significantly damaged. Did the driver get rear-ended as well, with
the other car out of frame?

~~~
corresation
The SUV looks showroom ready. That looks like an ad for SUVs.

~~~
asdasf
You don't want the vehicle to look show room ready. You want the people inside
the vehicle to be unharmed. The best way to achieve that is for the vehicle to
absorb the forces of the impact. Thus making it not look showroom ready.

~~~
001sky
not necessarily. its fine if the other car absorbed all of the implact during
its displacement, for example. also, if the other car crupmled to mush, doing
the same. it is not fine for the safety of others on the road, however.

------
Peroni
This sort of thing happens all the time with high-end cars without any
external factors like hitting debris.

Lamborghini -
[http://editorial.autos.msn.com/blogs/autosblogpost.aspx?post...](http://editorial.autos.msn.com/blogs/autosblogpost.aspx?post=21bc5c89-5753-4491-b871-52bdadf9a677)

Ferrari - [http://www.autoblog.com/2010/09/01/ferrari-458-italia-
recall...](http://www.autoblog.com/2010/09/01/ferrari-458-italia-recalled-
fire-risk/)

------
bane
Well, there's bound to be issues in what's essentially the full 1.0 model of
Tesla's car product (let's be honest, the Roadster was an extended beta).

I live in an area that manifests overall economics in the form of cars
(there's a Maserati, Ferrari and Porsche dealer all within 10-15 minutes of my
house . When the housing bubble was booming, ~$100,000 cars were _everywhere_.
I remember seeing so many Porsche products on the road I thought that there
must be a North American Porsche factory nearby -- I would literally see at
least one at every stoplight

When the economy took a downturn, all those cars disappeared and were replaced
by more "practical" cars. For the last 2 or 3 years I might see a Porsche once
a week.

All of a sudden, in the past year things are starting to return to the old
ways, except instead of Porsche products I see Teslas _everywhere_. I was
expecting Teslas to be like the odd Lamborghini I see once a month or so. But
no, I see at least one every day of the week, and I work at home. They seem to
have hit the magic combination of great product and a growing economy - which
is what's needed when you enter the market with luxury vehicles and work down.

I'm absolutely not concerned about the current future of Tesla, their cars are
selling like hotcakes right now, and I bet the Model X will sell like wildfire
with the stay at home coffee shop visiting yoga pants wearing stylish soccer
mom demographic that seems to make up 90% of my neighborhood. I fully expect
to see at least one Model X on every block in my neighborhood...after all,
when times were booming, there was a Cayenne on every block.

~~~
chrisgd
Don't talk about my wife like that

------
craigyk
I knew something like this would happen and send the stock tumbling. I bought
in at ~18 and got out at ~150 with the intention to buy back in if it ever
fell significantly. I assumed this would happen.

BTW, I am a huge fan or tesla and bought in originally because I believe in
what they are doing, but the gains got too be too much to not lock in. I'd be
buying back since I still believe that they are the future and the most
forward looking car company at the moment. The big car companies are going to
keep showing up at Tesla's door for access to their tech and know-how, and
it's going to cost them.

------
barry-cotter
The way to make money is to buy when blood is running in the streets. - The
fourth Baron Rothschild.

This is news because it's the first time it's happened, to a new technology.
Had I a brokerage account I would be buying.

~~~
coob
This news was also combined with Baird downgrading (which probably has more to
do with the drop). TSLA is a great stock and a good long term hold but if
you're in the short-medium market it's probably overpriced.

I say all this of course as a smug fucker who bought at below $30 :)

~~~
MBCook
I bought at about $40, about a week before they released numbers and suddenly
ran up over $120. I really wish I had bought more, but I was actually just
buying a few shares because I liked the company, I never expected to make any
real money on it.

------
mseebach
"Shares of Tesla Motors Inc. fell $12.05 to $180.95 — the stock's biggest one-
day decline since July 16."

Wow, the entire value of the last 14 days worth of growth was wiped out in a
day. It's not a "tumble", it's a full-on bloodbath!

~~~
graiz
I own some TSLA stock and in my opinion it's a blip. The stock is heading
north of 200 before the end of the year, it's just a matter of velocity. The
historic velocity is so much faster then any other company that I expect
corrections on a weekly basis. Stock trading is often emotional like a poker
player that goes on-tilt. The savvy investor actually sees buying
opportunities at moments like this.

~~~
davedx
Likewise. I'm long TSLA and staying that way.

------
mrb
Meanwhile, hundreds of gas-powered vehicles _also_ catch fire when colliding,
but nobody bats an eye...
[https://www.google.com/search?q=vehicle+catch+fire&num=100&e...](https://www.google.com/search?q=vehicle+catch+fire&num=100&es_sm=93&biw=1255&bih=760&sa=X&ei=0KlNUvW6HabliwL6hoGYAQ&ved=0CCEQpwUoBg&source=lnt&tbs=cdr%3A1%2Ccd_min%3A1%2F1%2F2013%2Ccd_max%3A9%2F30%2F2013&tbm=nws)
Stock holders are so irrational.

~~~
ZachPruckowski
While it's safe to say that Toyota or Ford could weather a safety scandal
without massive long-term damage, the same isn't necessarily true with an
upstart like Tesla.

------
JimmaDaRustla
Yes, Tesla is a car. Never heard of any other car companies losing such a
massive amount market capital due to one accident...hell, even the passengers
were safe AND the fire was contained to the battery bay. I've seen cars that
burn to the ground despite the firewall.

If anything, I have a more positive look on Tesla's now than I did before.

~~~
pwelch
Agreed. After reading the details I want one even more.

------
kgermino
Ok I read it quickly, but it seems like the fire was in the Frunk and the
batteries are under the cabin. That makes it seem like it's just a normal
electrical fire - probably from something getting shorted after he drove over
'metal debris' \- and not anything specific to the batteries. If that's
correct this is unfortunate for Tesla as even gasoline cars (and certainly
hybrids) can have an electrical fire after hitting something.

Either way it was bound to happen eventually.

~~~
kgermino
noprocrsted out of my edit window, but I stand corrected:
[https://news.ycombinator.com/item?id=6488339](https://news.ycombinator.com/item?id=6488339)

------
justin66
It would be really interesting to see what penetrated the battery, although it
sounds like we probably won't. When determining the safety of a vehicle one of
the things that is not looked at AFAIK by the NHTSA is how the vehicle deals
with, for example, exhaust system debris coming up into the engine
compartment, floor, fuel tank, etc.

At the risk of being overly contrarian: it's possible this debris would have
done something much worse if a Honda Civic or something had hit it. There is
not enough data to draw a conclusion on that, let alone make a statistical
comparison between vehicles.

------
spongle
I've had two cars catch fire: 1974 Land Rover Series III, 2006 Fiat Doblo
Active. The first was an electrical fire and the second was a diesel leak
(diesel burns like fuck when it gets hot).

This isn't unique to Tesla! I'd rather drive a Tesla but they're too small for
me and too expensive.

~~~
masonhensley
Please don't make me think my old landy is going to catch fire. I have
nightmares about such things.

~~~
spongle
They do that. You just fix 'em. This was a short in the ignition system which
caused the entire ignition wiring to burn out. Took out everything electrical
nearby as well including lights. Fortunately I had a hand crank in the back so
it got crank started (took ages but worked) and got it home just before it for
dark. Took about 4 hours and £50 to fix it myself.

If that was a modern vehicle you'd be screwed so don't have nightmares - it'll
probably still get you home with no electrics (if it's pre-defender :)

------
ck2
Keep tumbling, I'd like to buy it when it hits the low point because this is
silly.

I'd drive a Model S any day if I could afford it.

~~~
debacle
That was my thought! As soon as I saw this headline, I started moving money
around to make a purchase, but the stock is already recovering.

~~~
marvin
Give it another go, it's not quite recovered yet :P

~~~
debacle
I'm waiting for 170.

------
ericcumbee
Wonder if Boeing will Reciprocate the offer to help them figure it out. If I
were Boeing's PR person and felt a tad cheeky this morning I just might.

------
forktheif
"Shares of Tesla Motors Inc. fell $12.05 to $180.95 — the stock's biggest one-
day decline since July 16."

Wow, that's the biggest drop two and a half months. Truly the end is in sight
for Tesla.

------
rjtavares
Accidents with new technology are reported disproportionately to accident with
old technology. Probably a good opportunity for contrarian investors (although
they may be a little burned from the 400% stock price increase this year...)

------
DanielBMarkham
It will be interesting to watch the market react to this.

This is important not because of Tesla, but because the auto-drive car makers
are going to have an even bigger hurdle deploying auto-drive. Yep, there will
still be crashes, and it remains to be seen how the news media will run with
these types of stories -- explaining the context, or piling on. My bet is that
initially they'll explain the context, but just like everything else they
cover, eventually they'll go for video of flaming orphans over telling the
larger story of how much good is being done. Here's hoping I'm wrong.

------
aristus
All it takes is some bad press. People _still_ joke about the Ford Pinto.

~~~
jlgreco
Yup, just some bad press and dozens to hundreds of people dying in fires after
surviving the initial crash.

(I've seen estimates as high as 900 people killed in Pintos that way. That
might not be accurate or fair, but that _is_ part of the public perception
that fuels the Pinto jokes decades later.)

~~~
rodgerd
Don't forget the "conciously choosingto let people burn to death rather than
fix the fault because lawsuits are cheaper" bit of the story.

------
chromaton
I went to a Tesla owners group meetup a few months back. It turned out that
although they loved their new cars, every one of them had problems with their
Model Ss that required a trip back to the dealer.

~~~
R_Edward
When you buy a piece of bleeding-edge technology, you're kind of signing up
for a few problems that require attention. Goes with the territory. The real
question is, once you identify a problem, how is the company doing at fixing
it? If they're giving excellent service, you're going to have a high overall
satisfaction level.

And may I just put this offer out there: if there are any millionaires who are
unhappy with their (unburned) Model S, I will be glad to take it off their
hands for just $99.99 plus shipping. (Who am I kidding? I'll cover the
shipping myself.)

~~~
TheComrade
If this was about a crime and not a car, your attitude would be considered
victim blaming.

I doubt the dealers are emphasizing that you are likely to have a problem with
your expensive purchase.

~~~
R_Edward
Salesmen, who make their living by selling luxury items, don't emphasize the
negative points of the thing they're selling? Color me surprised.

Call it victim blaming if you want. I call it being realistic about the
premium you pay for being the first person on your block to have the shiniest
toy. And for the record, I wasn't addressing the issue of the fire; I was
addressing the comment about Tesla owners being generally happy with their
purchase, despite having had a few things that required service. Not too many
crime victims express the sentiment that, despite a few negative items, they
are generally satisfied with the transaction.

------
robomartin
The truth of the matter is these are the tests electric cars will have to
endure over a period of time in order to reach wide adoption. Despite what's
been said here a full tank of gasoline is far safer than a fully charged
battery pack with enough energy to go 300 miles. Before anyone mauls me,
consider how many gasoline cars have been driven and, yes, crashed, world-wide
since gasoline cars came into mass production. There have probably been
millions of accidents without fires, even with fuel leaks. There's probably no
imaginable way to compare the two at this time. We simply don't have enough
data. And, no, linking to a horrible crash video on youtube involving gasoline
igniting does absolutley nothing to support arguments on either side.

The one issue with electrics that is not spoken of is the fact that you have a
several hundred volt high energy system that could very well electrocute
passengers. I fully expect that to happen one day (in general, not necessarily
Tesla). If and when that happens you can bet it will set the breaks on
electrics for a while and relevant stocks will plummet.

I still believe electric cars are the future. We simply need to go though the
evolutionary process that will make them really safe for hundreds of millions
of electrics to share the road. What happens when you have a pile-up of ten or
twenty electric cars on a fogg-covered highway? A pile of mangled wrecks with
400 Volt high energy systems is unimaginably dangerous. I can think of a few
horrific scenarios under those conditions.

At some level part of me thinks that fuel cells are the future, not batteries.
Having something relatively benign that can leak out would be a good thing.

~~~
marvin
Your argument doesn't make sense. This is a question of carrying a dense
energy source with you at high speed. A pressurized tank of hydrogen has just
as big potential for causing massive damange as a fuel tank or a battery.
Probably more, since hydrogen will violently explode if ignited in the
atmospohere.

~~~
robomartin
Where did I even mention hydrogen?

------
keyle
Probably worth buying the shares now then... I mean if we consider the amount
of combustion engines that caught on fire in history... You get my point.

------
WatchDog
Video:
[http://www.youtube.com/watch?v=q0kjI08n4fg](http://www.youtube.com/watch?v=q0kjI08n4fg)

~~~
loceng
Guy recognized it's a Tesla ... that's probably more of a positive than not.
That video wouldn't really show how slow the fire actually likely started.

------
drinkzima
Perspective:
[http://stockcharts.com/h-sc/ui?s=TSLA&p=D&yr=3&mn=0&dy=0&id=...](http://stockcharts.com/h-sc/ui?s=TSLA&p=D&yr=3&mn=0&dy=0&id=p54222571534)

TSLA has been on a moonshot, it is "tumbling" all the way back to September
prices.

------
tocomment
Does the charge in the battery affect the flammability? For example would a
completely discharged battery never catch fire?

------
Kiro
And I thought SpaceX was the dangerous company here. Maybe Tesla will be the
first of Elon Musk's companies causing a disastrous accident.

Innovation and quick iterations are great for R&D but come with a price when
released on the market too soon. That's why I put my money on Orbital and the
other dinosaurs instead.

~~~
vvvVVVvvv
You know what happened to dinosaurs, don't you ? _Poof_

------
linux_devil
Disappointing stock traders don't believe in innovations. Right time to buy
stocks for rest of us.

~~~
loceng
It's all a big game, it's silly. Much like how Bitcoin currency will fluctuate
- and much how it will be gamed by those who have the ability to influence
large markets and opinion on things (whether from people not being educated,
or reacting emotionally).

------
chbrown
I don't think "tumbles" accurately describes "declines to the price it was two
weeks ago", particularly since no one used the word "skyrockets" for the last
two weeks' rise (it didn't), or some similarly exciting terminology.

~~~
thedufer
It fell to its price from two weeks ago in less than a day. That's around 20x
faster. So yeah, I would use more excited terminology.

------
lumberjack
It baffles me how somebody willing to buy TSLA would become scared so easily.
I don't pretend to understand markets so could anyone explain how such
behavior is possible?

~~~
jaynos
You sell because you expect everyone else to do the same. Then you hope to
rebuy at a lower price and make more money when the stock returns to pre-fire
level.

No one owns Tesla stock for market value reasons. It's overpriced, but that
doesn't mean you can't make money on the stock in the short term.

~~~
CamperBob2
_No one owns Tesla stock for market value reasons._

I own it because I honestly don't know where else to put the money I allocate
towards tech stock purchases. AAPL has no room for further growth until we
colonize the outer planets, and other recent success stories like YHOO seem
even less sustainable.

Picking stocks of reasonably promising companies with incompetent competitors
seems like a good strategy, hence TSLA.

------
joshdance
12 Tesla crashes. 1 fire. The fire was contained, the driver was alerted, and
the car was stopped safety and evacuated. If I had money I would buy Tesla
stock. And a Tesla.

------
utefan001
I am sure it is easier said than done, but it seems like the batteries simply
need to be better protected. Something like a carbon fiber or titanium under
shield.

------
oddshocks
Seems like a normal potential issue upon hitting debris.

------
linux_devil
Will be a lesson for Tesla, I hope they improve and make it more better. I
will still go for Tesla

------
Fuxy
Best time to buy Tesla shares I guess with everybody panicking.

------
tomelders
Fools and their money have an inordinate amount of influence.

------
knodi
Tesla stock should tumble because its grossly over valued.

------
chris_mahan
Remember Buffet: Sell exuberance, buy fear.

------
gmacdon89
arson?

