For Tesla Motors, the question is, what about the fire next time?
Over the past six weeks two of the Silicon Valley automaker’s luxury electric sports sedans have caught fire after drivers ran over metallic debris that perforated their cars’ lithium-ion battery packs. A third Model S went up in flames in Mexico when the driver lost control of his car, crashed through a concrete wall and hit a tree.
Each crash and burn has followed a predictable playbook. First Tesla’s high-flying stock takes a tumble as investors react with the same irrationality that has pumped up the company’s shares over the past year. In the days after the first fire, on Oct. 1 in the state of Washington, Tesla shares fell nearly 11%.
The Mexico fire happened on Oct. 18 but didn’t become public until Oct. 28. The market’s response was more muted, with Tesla’s share price falling 6%.
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