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NHTSA: Tesla Model S Fire Not the Result of Safety Defect

The National Highway Traffic Safety Administration (NHTSA) says Tesla Motors (NASDAQ: TSLA  ) will not face a formal investigation surrounding a fire in one of its Model S vehicles in early October.

In its statement, the NHTSA noted that "after reviewing all available data," it "has not found evidence at this time that would indicate the recent battery fire involving a Tesla Model S was the result of a vehicle safety defect or noncompliance with federal safety standards."

The fire caused concern among Tesla shareholders and the stock dropped as video of the fire circulated. Tesla CEO Elon Musk took to his blog in the days after the fire to inform people that "a Model S traveling at highway speed struck a large metal object, causing significant damage to the vehicle. ... A fire caused by the impact began in the front battery module -- the battery pack has a total of 16 modules -- but was contained to the front section of the car by internal firewalls within the pack."

Tesla stock, which has more than quadrupled since the beginning of the year, dipped after David Strickland, NHTSA administrator, said Tuesday that the agency was "gathering data" on the fire.

The announcement that there would be no formal investigation came Thursday.

The NHTSA concluded its statement this week by saying, "the agency continually reviews incoming and prior consumer vehicle complaints, as well as other data to identify potential vehicle defect trends and takes appropriate action as necessary."

In January 2012 General Motors recalled 8,000 Chevrolet Volts after an NHTSA investigation revealed that certain impacts would cause fires in the vehicle. However GM noted the fires which occurred three weeks after the simulations were the result of improper battery discharging procedures, and largely considered the Volt recall as a customer service maneuver.


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