NEW YORK (CNNMoney) — Tesla’s stock dropped 6% Wednesday following a negative analyst report and a fiery crash in one of the company’s Model S sedans.
Stock analysts at Baird downgraded the stock to “neutral” on Tuesday which, along with some other negative reports, seemed to start the sell-off in the stock.
Then, in the late morning Wednesday, the auto Web site Jalopnik.com posted photographs from a reader showing a Tesla Model S on fire on roads near Seattle, Wash.
Tesla later issued a statement describing what happened.
“Yesterday, a Model S collided with a large metallic object in the middle of the road, causing significant damage to the vehicle,” Tesla said.
Automatic alerts warned the driver to pull over, the statement said, and the fire began only after the driver was out of the vehicle. The fire eventually consumed much of the vehicle’s front end.
“All indications are that the fire never entered the interior cabin of the car,” Tesla said in its statement. “It was extinguished on-site by the fire department.”
The Model S is a fully electric car with its battery pack housed in the floor of the vehicle. Tesla said the fire started when the metallic object directly hit one of the 16 modules within the Model S battery pack.
“Because each module within the battery pack is, by design, isolated by fire barriers to limit any potential damage, the fire in the battery pack was contained to a small section in the front of the vehicle,” a spokeswoman said.
Tesla has made much of the outstanding safety of its cars, recently boasting that the Model S sedan would have gotten more than five stars in government crash tests if the scale had only gone that high. The car has also gotten rave reviews from magazines like Motor Trend, Automobile and Consumer Reports.