Tesla Motors Inc (TSLA) Supported By Panasonic After Model S Fires
Written by: ValueWalk
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Panasonic, which makes the battery cells for Tesla Motors Inc TSLA's Model S, assures investors that they and Tesla both have high safety standards.
Tesla Motors Inc has gotten a lot of flak because of the three Model S fires over the last five weeks, but not much attention has been paid to the company which makes the batteries in its vehicles. After all, since the fire started in the battery compartment after it was punctured and the car's design directs the flame outside of the vehicle, doesn't that mean the battery cell maker might possibly share part of the responsibility?
Panasonic sticks up for Tesla
Although Panasonic Corp. TYO:6752 could have played it safe by remaining in the shadows regarding these fires, the company spoke up in support of Tesla Motors Inc ify.valuewalk.com="" />. Bloomberg's Alan Ohnsman reports that the company's chief financial officer expressed support for Tesla and stands by its batteries. Tesla continues to investigate the latest Model S fire, which happened after the vehicle ran over a metal tow hitch on a highway in Tennessee.
"We pay great attention to safety issues and so does Tesla," Panasonic CFO Hideaki Kawai told Bloomberg. "I don't have any concerns."
Panasonic Corp. TYO:6752 and Tesla recently announced that they were expanding their partnership so that Panasonic could supply Tesla with even more battery cells. Nonetheless, Tesla still remains concerned about being able to keep up with demand for its vehicles.
Tesla investigation urged
Now that there have been three Model S fires in just a matter of weeks, many are pushing for an investigation of Tesla Motors Inc 's vehicles. Center for Auto Safety Executive Director Clarence Ditlow urged the National Highway Traffic Safety Administration to investigate this week's accident in Tennessee. A spokesperson for the agency said they are working with Tesla to gather information about the accident and decide if an investigation is necessary.
This week's fire is very similar to the first Model S fire in which the vehicle also ran over a metal object in the road. In that case, the NHTSA decided that an investigation wasn't necessary. So the question this time will be whether the circumstances are similar enough that a probe isn't necessary or whether the fact that two wrecks with similar circumstances resulted in a fire actually suggests that this is a common enough problem to warrant investigation.
-By Michelle Jones