NHTSA Asks Tesla Motors Inc (TSLA) for Model S Details

The U.S. National Highway Traffic Safety Administration (NHTSA) has asked for various details, including consumer grievances and property damage claims, from Tesla Motors Inc (NASDAQ:TSLA) in relation to the ongoing Model S investigation for safety defect.

Tesla Motors Inc (NASDAQ:TSLA)

The automaker has also been asked to submit details regarding any design alteration and engineering drawings of Model S to the U.S. auto regulator. Tesla Motors Inc (NASDAQ:TSLA) is supposed to provide all the information by Jan 2014.

NHTSA started the investigation after three Model S vehicles caught fire in a span of five weeks. In early October, a Model S electric vehicle caught fire near Seattle, U.S., after the vehicle collided with a “large metallic object” which damaged the front end of the car. This incident was soon followed by another Model S vehicle catching fire in Merida, Mexico. The fire broke out after the vehicle crashed through a concrete wall and hit a tree.

The third fire incident was reported on Nov 7. The incident occurred near Smyrna, Tenn., after the vehicle hit road debris. The collision led to fire in the front portion of the vehicle.

As a result of these fire incidents, NHTSA demanded details regarding the after effect of the damage of battery pack of Model S and the method adopted by Tesla Motors Inc (NASDAQ:TSLA) to solve those problems.

Recently, German Federal Motor Transport Authority or Kraftfahrt-Bundesamt (KBA) revealed that it did not find any manufacturing defect in Tesla’s Model S. The authority’s statement came after it examined and reviewed the vehicle following the recent fires. The German authority issued a letter stating that Tesla Motors Inc (NASDAQ:TSLA) does not need to take any action under the German Product Safety Act.

Kraftfahrt-Bundesamt plays a similar role in Germany like the NHTSA in the U.S. It has the power to ask for recalls in case of any defect detected in a vehicle.

Tesla Motors Inc (NASDAQ:TSLA) designs and manufactures electric vehicles and electric vehicle powertrain components for partners including Toyota Motor Corp (ADR) (NYSE:TM). The company currently retains a Zacks Rank #3 (Hold).

Better-ranked automobile stocks include Daimler AG (USA) (OTCMKTS:DDAIF), and Ford Motor Company (NYSE:F). Both carry a Zacks Rank #2 (Buy).

Disclaimer: This article is written by Zacks Equity Research and originally published at Zacks.com.

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