Tesla Motors Inc (NASDAQ:TSLA) Recovers After Two Days Of Sell Off
In the automotive industry, safety of vehicles is perhaps the key selling point and after viral video of a car burning on a highway was uploaded to the Internet, Tesla Motors Inc (NASDAQ:TSLA) has been suffering from severe fallout. The car involved in the fire was a Model S which had just been awarded the National Highway Traffic Safety Administrations five-star safety rating in August of this year and although this was the first battery fire in a Tesla Motors Inc (NASDAQ:TSLA) car, it still did not prevent stock price from falling for a second straight day. There has been roughly a 7% decline in stock price since the incident and prices continued to fall even after trading closed. However shares of Tesla Motors Inc (NASDAQ:TSLA) have recovered and are up in today’s trading session.
Shares of Tesla Motors Inc (NASDAQ:TSLA) have been impacted both negatively and positively in the past by news items such as this, but industry insiders expect that this particular incident could more far-reaching effects than usual. The fire was caused by eruption of the cars lithium-ion battery after the driver ran over a piece of metal and recent concerns over the dangers of this type of battery were again brought sharply into focus. In the past year, the Chevrolet Volt car and Boeings 787 “Dreamliner” jets have both been plagued with similar problems related to lithium-ion batteries and the heightened consumer interest in the issue will be a big setback for Tesla Motors Inc (NASDAQ:TSLA) as they seek to move forward.
In what seems to be a glimmer of hope for Tesla Motors Inc (NASDAQ:TSLA), their stellar safety record to date appears to have eased some of the initial concerns and experts indicate that the fire was not indicative of a manufacturer issue but was more of a “freak” accident. Feedback from existing Tesla Motors Inc (NASDAQ:TSLA)´owners has remained positive and there are no hints of any backlash or boycotts at this time.