This thread is NOT intended to debate if there is an increased fire risk from collision with road debris. There are plenty of other threads to discuss that.
This thread assumes that there is an increased risk. If you don't agree, debate it in other the other threads.
The question here is, if you assume an increased risk, what are the possible outcomes of the NHTSA investigation?
Possible outcomes I can think of include:
1. NHTSA decides to do nothing. Increased risk is deemed acceptable. There have been no injuries so far. Crash test results have been excellent. No markedly increased risk of injury. Possibly state an increased risk of damage or maybe a slightly increased risk of injury but nothing significant enough to warrant any changes to the vehicle.
2. Some action required of Tesla. Could be as simple as raising the default height, which Tesla has already done. Or a requirement to further reinforce the battery, possibly with a steel shield, more compartments, additional fire retardant, etc. This seems to be the biggest question. What can reasonably be done to improve its fire resistance in this type of accident and is NHTSA likely to require some action.
3. NHTSA declares the battery technology too volatile or requires a level of battery protection that is an unreasonably large design change to the model S, such as requiring it be moved from the bottom of the vehicle.
I tend to think its #3 that the market is worried about. If this were to occur it might mean the end of Tesla. This does not look like a realistic outcome. NHTSA would have little to stand on to require a major change to the Model S given its safety record regarding injuries. I would assume the benchmark should be: is there a significant and blatant safety defect that can be reasonably corrected that puts the Model S at clearly higher risk of injury vs. an ICE. That bar is no where near reached. This outcome thereby looks highly unlikely.
If #2 occurs and NHTSA requires some action, what is the likely effect to Tesla stock? If its a minor change such as raising the car height, then the stock may rally. If its a more complex but still minor fix, the financial impact of slowing production and raised costs would factor into the equation. Stock may stay where it is or go down slightly. A more significant change would affect the stock more.
If #1 occurs, the stock should rally.
Thoughts, comments? (Assuming heightened risk. If you don't agree debate in other threads)
This thread assumes that there is an increased risk. If you don't agree, debate it in other the other threads.
The question here is, if you assume an increased risk, what are the possible outcomes of the NHTSA investigation?
Possible outcomes I can think of include:
1. NHTSA decides to do nothing. Increased risk is deemed acceptable. There have been no injuries so far. Crash test results have been excellent. No markedly increased risk of injury. Possibly state an increased risk of damage or maybe a slightly increased risk of injury but nothing significant enough to warrant any changes to the vehicle.
2. Some action required of Tesla. Could be as simple as raising the default height, which Tesla has already done. Or a requirement to further reinforce the battery, possibly with a steel shield, more compartments, additional fire retardant, etc. This seems to be the biggest question. What can reasonably be done to improve its fire resistance in this type of accident and is NHTSA likely to require some action.
3. NHTSA declares the battery technology too volatile or requires a level of battery protection that is an unreasonably large design change to the model S, such as requiring it be moved from the bottom of the vehicle.
I tend to think its #3 that the market is worried about. If this were to occur it might mean the end of Tesla. This does not look like a realistic outcome. NHTSA would have little to stand on to require a major change to the Model S given its safety record regarding injuries. I would assume the benchmark should be: is there a significant and blatant safety defect that can be reasonably corrected that puts the Model S at clearly higher risk of injury vs. an ICE. That bar is no where near reached. This outcome thereby looks highly unlikely.
If #2 occurs and NHTSA requires some action, what is the likely effect to Tesla stock? If its a minor change such as raising the car height, then the stock may rally. If its a more complex but still minor fix, the financial impact of slowing production and raised costs would factor into the equation. Stock may stay where it is or go down slightly. A more significant change would affect the stock more.
If #1 occurs, the stock should rally.
Thoughts, comments? (Assuming heightened risk. If you don't agree debate in other threads)
