Tomahawk, WI 11/11/2013 (BasicsMedia) – After the latest fire on Tesla Motors Inc (NASDAQ:TSLA)’s Model S car on Nov. 6, putting the fire issue into perspective should answer the many questions which are obviously lingering on the minds of customers and investors about the safety of the cars the future of the maker.

The story begins that Tesla’s three Model S cars have been involved in fire accidents since the beginning of last month until the week ending Nov. 8. Due to the latest fire and the earnings data released Nov. 5, which missed analysts’ estimates, shares of the electric automaker have been falling. Car fires are a common phenomenon even with the conventional cars, not just electric ones like Tesla’s. However, the case of Model S fire is very much in news because just a few of such fires have happened in the automaker’s vehicles. Also, it’s because Tesla’s line of vehicles hold special position in public opinion as the cars need no fuel, a far cry from what people have known for centuries about cars. So all in all, Tesla’s car fire cases re not isolated ones.

Circumstance of fire

The issue of driver might come into perspective when analyzing the case of fires in Model S cars. In the first fire case, the vehicle caught fire after running over a metal while cruising. In the second case, the care went aflame after hitting a concrete wall and a tree. None of these accidents, including the latest, indicated defect on the cars.

Tesla host high safety regards from the regulators and this puts it safe from manufacturing blame. However, the perception issues which the fires are having on its cars can prove hurting to its business which is just beginning to pick up. The company should to start its own investigation into the fires if it’s not doing that already. Why should Tesla move with speed in doing this? It is because if the National Highway Traffic Safety Administration does its own investigations and initiates involuntary recall of the cars over safety concerns, this would have economic and reputation impact on the company at a time when investors are just waiting on it to turn profitable and at a time when auto customers are beginning to show their interest in cars which ask for no fuel.

Tesla’s cars are more like smartphones on wheels. And like smartphone, they are built on value and trust. So if these two evaporate, there would be no business and no future. This is why Tesla needs to fix the problem even though car fires are not its own problem.

Investors shouldn’t be worried about the Model S fires recorded so far, the vehicles carry regulatory approvals on safety, furthermore, defects on the cars are unheard of, and this means that Tesla’s reputation is as intact as it has been if it hasn’t soared in recent times.

As to whether the company has any future for its unique devices on wheels in the auto market, yes. Tesla reported below expectation chiefly because it’s committing a lot of cash to its labs and facility development. Unlike other automakers, Tesla sales its cars directly to customers and it’s thus developing its own dealer showrooms. These activities are capital intensive. But after all this is done, and considering the growing orders for Model S in Europe and China, it’s only fair to say that the best of Tesla is near term.

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