Tesla to Make Changes in Response to Media Scrutiny Over Car Fires

The announced changes came at the end of a lengthy post on the mission of Tesla Motors at the company blog. After Musk first defended the car’s safety and called the media response to the fires an overreaction, he got to the specifics of the three actions to be taken:

First, we have rolled out an over-the-air update to the air suspension that will result in greater ground clearance at highway speeds. To be clear, this is about reducing the chances of underbody impact damage, not improving safety. …

Second, we have requested that the National Highway Traffic Safety Administration conduct a full investigation as soon as possible into the fire incidents. While we think it is highly unlikely, if something is discovered that would result in a material improvement in occupant fire safety, we will immediately apply that change to new cars and offer it as a free retrofit to all existing cars. …

Third, to reinforce how strongly we feel about the low risk of fire in our cars, we will be amending our warranty policy to cover damage due to a fire, even if due to driver error. Unless a Model S owner actively tries to destroy the car, they are covered.

As we pointed out recently, three car fires may not be enough to prompt a recall. However, it would not take many more similar fires, or an actual injury, to force Musk to change his mind, or have it changed for him.

In the meantime, Telsa faces a dropping share price and pressure from high-end carmakers like BMW and Mercedes Benz as well as mass producers like General Motors Co. (NYSE: GM), Ford Motor Co. (NYSE: F) and Toyota Motor Corp. (NYSE: TM). Even Musk himself has suggested that Tesla’s shares are overvalued.

Shares of Tesla were down about 3.7 % in premarket trading Tuesday to $117.01. The stock reached a multiyear high of $194.50, at the end of September but has been dropping since then.