Tesla Motors Inc stock sinks as third car in 5 weeks catches fire
business.financialpost.com
business.financialpost.com
I did the math on Tesla when I invested in it early this year, and it should have topped out at around 44-46 a share, calculating in the difficulty of reaching their goals over the next two years with no significant issues. Then, after different stages were reached, it should have risen. This did not happen. Instead, it rocketed up immediately.
That was all flash in the pan investment and not real analysis of the company, so it's no surprise that it's decreasing when there are minor problems.
What math did you do? An intrinsic valuation? That would seem very speculative given Tesla's uncertainty.
Another recall from the 70's was this one: http://en.wikipedia.org/wiki/Ford_Pinto#Fuel_tank_defect People seem to forget that they are driving around with gallons of combustible liquid.
http://www.nytimes.com/2006/08/27/automobiles/27FORD.html?_r...
I disagree with this point. A fire in a gasoline powered vehicle always has to do with gasoline. Even if the fire did not start due to an issue in the fuel delivery system. This system is commonly laid out in a way that most of the vehicle is near a fuel line at all times.
I am not defending Tesla, but pointing out that gasoline powered vehicles also carry fire risks. Do realize that gasoline powered vehicles also carry batteries that may explode/catch fire under given circumstances. I've had a battery or two blow up near me before, and it is not fun.
I've personally witnessed a few that were the result of wrecks, and just the other weekend I drove by a couple guys trying to put out a flaming engine on a beat up old truck.
How exactly do these compare to gasoline/diesel powered vehicles?
It just feels like somebody's looking for an excuse to go after Tesla. I read these articles about people leaping over concrete barriers and wrapping their car around a tree and just wonder "what the hell did you expect would happen?"
Yes, quite improbable. It might break the engine, but there is nothing in the front of a car that would catch fire from such an impact.
So 194,000 vehicle fires per year, or 18,602 within any given five week period.
Toyota's market share is 14.2%, so if the fires are evenly distributed, there would've been 2,641 vehicles of that brand catching fire. That's pretty close to 3,000.
Tesla isn't the victim of a smear campaign, this is fairly minor news that gets amplified in the HN/tech bubble.
The key is that in both cases, the entire mass and momentum of the vehicle were contributing to the intrusion of a piece of steel into an aluminum vessel. No engineering in the world is going to stop that steel from penetrating in that case. A different material and/or different placement will be needed to improve the situation.
Face it, battery technology is not sufficiently advanced to deliver good range without some serious trade offs. The trade off of the Tesla may prove to be the wrong choice long term.
No one would ever suggest lining the bottom of a car with a gasoline tank, fortunately we don't have too because the power density is so high. Hence they can put tanks where a collision or road debris damage are least likely to damage them.
However Tesla needs a stupendous amount of battery to get its range. Hence we get large cars where they have chosen to isolate the entire pack at the floor of the car. They made the choice to dispense with a central tunnel which could hold more batteries, not use the front engine area or any trunk space.
There were two or more reasons for their design choice, first because of the sheer amount of batteries needed and second because of pack swapping. I don't think the trade off is worth it.
They can use some of the front "frunk" area to have a raised stack of batteries where the traditional firewall is and do similar in the rear. The could have a raised tunnel down the center line and reduce the need of having batteries so far forward. There were many choices available but they wanted swappable packs.
What statistic I want to see is, how many penetration events have their been versus how many fires. How many cells have to be penetrated to create a fire? Is there some flaw that another component is failing during these minor accidents that is causing the fires?
As a longer term fix, move the battery pack rearward and design in a little more protection.
Sure, debris can damage the underside and cause the car to catch fire, but putting the packs in the front or rear of the car can cause it to explode on impact as well. Having it on the underside will probably cause fewer fires than having it in the front for example.
That said, consider gasoline cars: The fuel needs to travel from the tank to the engine. Effectively, an impact anywhere on the fuel line can cause a fire.
Uh, yeah. Are you sure Li-ion batteries really explode, or do they just burn really fast? (In much the same way it's very, very difficult to get a gas tank to explode, but not so hard to get it to burn very fast.) I'm pretty sure it's hard to get them to explode.
You would be amazed the places people have put gasoline tanks on cars. Just behind the rear axle has been one of the stupidest, so it goes boom when someone drives into the back of you. http://www.autosafetyexpert.com/defect_fueltank.php
Just the one: 'if crush or penetration occurs perpendicular to electrode edges, that deformation is likely to result in high impedance shorting between electrode layers and initiate cell thermal runaway.'[1]
This is an incredibly thorough piece of research:
[1] Celina Mikolajczak et all, (2011), Lithium-Ion Batteries Hazard and Use Assessment (p. 57, paragraph 5)
Retreived from: http://www.nfpa.org/~/media/Files/Research/Research%20Founda...
So when you read statistics on car fires you should try to exclude those if you can.
Fire from road debris would be very very unlikely. How would that even happen? I suppose it could cut a water pipe, and then cause overheating.
Fires from a violent crash do happen of course, and no one would criticize Tesla for those types, but from road debris? That shouldn't happen.
How on earth would that make a better comparison?!
Then to be fair, one should also take into account the increased reliability of the electric drivetrain.
There have been a lot of problems with fuel tank placement, with some designs being responsible for spraying passengers with flammable fuel, which subsequently catches fire.
The design criteria for internal combustion cars seems to be to place the energy storage such that it minimizes the chance of damage, and to take steps to ensure that the contents do not endanger the passengers. Gas tanks are not designed to withstand highway speed collisions with pointed steel objects and never burn. To apply such standards to electic cars is a double standard.
By the general standards of passenger cars, I'd say that the Tesla model S is a bit fragile, but still quite safe.
What's fragile about 6mm armour plate? And what's safe about 100% of the fires having a single source? It sounds like TSLA needs to put the battery somewhere more protected. They have it exposed right now (presumably for lower CoG and better handling). That might just be a design flaw. I think we can still keep an open mind on LiIon untill the designs are iterated upon more.
Urgh. Nice context switch. To be fair, the system as a whole seems to be a bit fragile, which is what I was actually saying. But in this specific strawman context: Lots of things are "fragile" when a piece of steel has a significant fraction of the momentum of a car behind it.
To me, still very dependable and robust for something with sportscar performance.
But I'm glad it's happening now, the sooner the correction is over with, the sooner we can get a sane valuation, and the sooner people can focus less on how ridiculous the price is, and more on how freaking awesome the cars are. (Fires and all)
Sorry, but NOBODY (much less we all) can predict short term stock movements. If I KNEW a correction was coming, I'd be a billionaire by now.
Petrol is way safer. The tanks are protected behind the second axle, and the fuel lines are either hardened or flexible, and in any event also well protected. That is why data show only 2% of fires are caus by problems relating to the fuel system. Tesla would need to have 200 more fires that did not involve the LiIon to become safer (on an apples to apples comparison). Something tells me that proving that case wouldn't do them any good.
Yes, but with petrol cars, we're benefitting from over 100 years of experience and engineering -- with many, many horrific fatalities included in the "experience." Considering how recently the Tesla engineers started off, I'd say they're doing a stellar job. (For heavens sakes, the system tells you what's up and warns you to pull over and get out!)
Specially when you add lead to it.
As an aside, I'd totally drive a Tesla if I could afford it. I'm not trying to say the car is unsafe. They use a riskier chemistry, but they've also gone to extraordinary lengths to manage that risk with really aggressive thermal management, barriers, etc. There have yet to be any injuries.
Spreading rumors is one very common tactic, but actual sabotage/'black ops' are also very possible.
I'm mentioning another non-exclusive possibility... and one that would work synergistically to expand the stock impact of any actual flaws. (It becomes more likely once the initial idea is planted, be it by flaw or random coincidence. Turn 2 or 3 real fires into twice as many with a little help, collect a billion dollars.)
Or do you think high-flying volatile stock values are never unethically manipulated in either direction?
Hey, where were you during each of the fires so far?
It's actually nothing. From my bloomberg terminal I can see ORCL US Equity has a Mkt Cap of $156,024.6M and TSLA US Equity has a Mkt Cap of 16,945.9M
So Oracle is about 9.2 times bigger than Tesla.
What's more important is the percent of the company you're getting with a share. (Obviously the same information in a different form), but I think more important to the small investor than share price.
121.45M - TSLA
4.56B - ORCL
So you're getting significantly more share of the company for your investment when you go for TSLA.