Tesla Reports Third Fire Involving Model S Electric Car

By Ben Klayman and Bernie WoodallTransportationReuters

Tesla Motor Inc's Model S electric car has suffered its third fire in six weeks, sending its shares down about 7 percent in early Thursday trading.

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The Tesla Motors Club website contains pictures and a story about another fire involving a Model S on Wednesday afternoon that a company spokeswoman confirmed. The accident occurred in Smyrna, Tennessee, where Nissan Motor Co <7201.T> makes the Leaf electric car.

Tesla said it has been in touch with the driver, who was not injured. The vehicle is registered to Juris Shibayama of Murfreesboro, Tennessee, according to the highway patrol. It was unclear if the owner was operating the vehicle.

"Our team is on its way to Tennessee to learn more about what happened in the accident," Tesla spokeswoman Elizabeth Jarvis-Shean said in a statement. "We will provide more information when we're able to do so."

The company said the fire was the result of an accident and was not a spontaneous event.

The Tennessee Highway Patrol said the incident occurred on Interstate 24 in Smyrna around 1:30 pm.

"It's possible that it ran over a piece of metal in the roadway," patrol dispatcher Kathy Bryant said. "There was extensive damage."

The police report did not say how fast the 2013 model year car was traveling, but the driver was able to pull off the roadway and get out of the car. The incident occurred four miles from the exit for the Nissan plant.

A woman who answered the phone at the lot where the car was towed said Tesla officials had contacted her.

On Tuesday, Tesla forecast a weaker-than-expected fourth-quarter profit and posted third-quarter Model S deliveries that disappointed some analysts.

The first Model S fire occurred on October 1 near Seattle, when the car collided with a large piece of metal debris in the road that punched a hole through the armor plate protecting the battery pack. U.S. safety regulators at the National Highway Traffic Safety Administration later said they found no evidence to indicate a vehicle defect.

The second fire took place later in the month in Merida, Mexico, when according to reports a car drove through a roundabout, crashed through a concrete wall and hit a tree.

Neither driver was injured in the earlier accidents and in all three cases the company said the owners have asked the company for replacement cars.

After the first fire, Tesla Chief Executive Elon Musk defended the safety performance of electric cars. "For consumers concerned about fire risk, there should be absolutely zero doubt that it is safer to power a car with a battery" than a conventional gas-powered vehicle, he said on a blog post.

Company executives called that first fire a "highly uncommon occurrence," likely caused by a curved metal object falling off a semi-trailer and striking up into the underside of the car in a "pole-vault effect."

At the time, Musk did not say if Tesla would make any changes to the Model S battery design as a result of the first accident. Jarvis-Shean had no immediate comment when asked if such changes were being considered.

Tesla's shares fell as low as $140.50 on Nasdaq.

Since the first fire, Tesla's shares have fallen more than 26 percent and this week's declines are the worst one-week drop since May 2012.

(Additional reporting by Deepa Seetharaman; Editing by Gerald E. McCormick and Maureen Bavdek)