The attempted theft of a Tesla model S in Los Angeles went horribly wrong this past weekend. On Friday, July 4, a man allegedly stole one of the electric vehicles from a dealership in West Hollywood. A subsequent chase involving the local authorities resulted in the car, which was said to be traveling at speeds of up to 100 miles an hour, splitting in half and bursting into flames after hitting two other vehicles and a lamp post. A total of seven people, including the driver, were injured, according to reports.
Tesla shares took a bit of a hit on Monday afternoon (the stock closed down about 3%, but is still up about 48% so far this year ) and the Wall Street Journal (paywall) is pinning it on the Independence Day incident. When several Tesla vehicles caught fire in a short space of time last year (in at least one case due to an accident, in others due to them running over metallic debris) it really freaked people out, sparking concerns about the safety of the company’s lithium-ion batteries.
Tesla, whose cars earned the highest safety rating from the National Highway Traffic Safety Administration, has since added additional protections and extra casing to its battery packs to assuage concerns about them. It is not yet clear whether this vehicle was retrofitted with these features.
At any rate, CEO Elon Musk is fairly obsessive about the safety and quality of Tesla vehicles and the company is already signaling that it will study the tragic incident closely to figure out what happened and make them even safer. “There aren’t so many S’s involved in major crashes, and certainly not quite like this one, so we absolutely want to have a look to understand what happened,” a spokesman told Bloomberg. This spokesman told Quartz he was unable to comment on any details of the incident while the police continue their investigations, but said the company naturally reviews selected incidents to understand how its vehicles perform.
The latest incident is a bit different to previous ones in that it involves a stolen vehicle and a police chase. But the knee jerk share price reaction certainly isn’t. It might be less likely that company will need to go out on another PR offensive this time, but whether the stock price will resume its relentless upward march like it has in the past remains to be seen.