Will The Recent Tesla Fires Damage Sales?

Electric Car

This analyst seems to think so.

Once again, Tesla has been the subject of bad publicity in recent weeks after three different Tesla models in Shanghai, Hong Kong, and San Francisco burst into flames without warning. And now there are fears that these incidents could negatively affect EV sales. "There are a lot of people who won’t want to take the risk if they think there’s a chance of an accidental fire,” a senior analyst with AutoTrends Consulting, Joe Phillippi, told CNBC.

This, of course, isn’t the first time there have been concerns about Tesla vehicles catching fire, but most of these incidents were caused by a crash. Elon Musk would downplay these concerns by arguing that a large number of gasoline- and diesel-powered cars go up in flames every year. What separates these recent fires, however, is that each car caught fire for no apparent reason while parked and that no accidents were involved.

Last month, alarming security camera footage from inside a Shanghai parking garage showed a Model S starting to smoke before exploding in a massive fireball. More recently, a Model S burst into flames while parked in Hong Kong and another Model S caught fire in a San Francisco garage this month.

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Tesla claims the fire in San Francisco wasn’t caused by the sedan but is investigating the two Chinese incidents. In the meantime, the automaker has issued an over-the-air software update to Model S and Model X vehicles to adjust charge and thermal management settings "to help further protect the battery and improve battery longevity.” Tesla said it was introducing these updates "out of an abundance of caution.”

While it’s perhaps too early to say whether these fires will ultimately harm EV sales, the timing isn’t ideal as major automakers such as Audi, Volkswagen, and Mercedes are about to significantly ramp up EV production.

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