The National Highway Traffic Safety Administration closed the probe
without asking Tesla for a recall after it the company raised the
sedan's ground clearance and added protective plates for the lithium
ion battery pack that powers the car.
NHTSA opened an investigation four months ago after two cars in the
United States and one in Mexico caught fire. NHTSA does not have
jurisdiction in Mexico.
The two U.S. fires started after drivers ran over debris in the
road, damaging the battery pack placed under the car between the
front and back seats.
In addition to raising ground clearance at highway speeds and adding
two protective plates, Tesla took steps to prevent overheating of
its charging systems, including giving customers upgraded wall
adapters and providing charging software upgrades.
"Tesla's revision of vehicle ride height and addition of increased
underbody protection should reduce both the frequency of underbody
strikes and the resultant fire risk," the NHTSA said on its website.
An analyst with industry research firm Kelley Blue Book agreed with
"Given that no punctures have been reported over the past four
months, even without the added protection, this fix should eliminate
the potential of a battery pack fire under all but the most extreme
circumstances," said Karl Brauer of KBB.
NHTSA said that while it was closing the investigation, it did not
rule out the existence of a defect and "reserves the right to take
further action if warranted by new circumstances."
Tesla officials did not immediately return requests for comment.
[to top of second column]
Tesla's shares were up 3.8 percent Friday at $215.18 in trading on
the Nasdaq. The company's shares have soared in the past year. A
year ago, it was trading at $37.75, and it tallied a record high of
$265 a share a month ago.
The Model S has received outstanding reviews from nearly all
third-party reviewers, including Consumer Reports.
The company's shares fell last fall when the two fires were widely
Tesla's shares during its initial public offering in June 2010 were
priced at $17.
(Reporting by Bernie Wodall in Detroit and Sagarika Jaisinghani in
Bangalore; editing by Kirti Pandey, Ted Kerr and Tom Brown)
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