A viral video showing one of its pricey Model S cars on fire sent Tesla Motors (TSLA) shares tumbling last week, but the company is getting support from one analyst.
Tesla insists that its electric vehicles are safe and that the incident shown in the video was the result of the impact of metal object that pierced its battery. On Monday, Elaine Kwei, an analyst at Jeffries, said that despite the accident, “driving a battery-powered vehicle is still far safer than driving with a tank of flammable fuel,” Bloomberg notes.
Kwei, who met with Tesla executives and drove Tesla vehicles, pointed out that the chance of a vehicle fire was “still far lower in a Tesla than for a conventional vehicle.” She also noted that most of the Tesla customers she had communicated with remained unconcerned by the fire, dismissing it as a “one-off event.”
In fact, Kwei has raised her price target for Tesla from $160 a share, to $210 a share. She forecasts that the company will deliver 5,500 cars during the third quarter.
The fire that drew a lot of online attention erupted in a Model S outside Seattle. The driver reported feeling the car strike something on the road and was able to pull off the highway and exit the vehicle before the fire consumed the front part of the car.
Shares of Tesla rose modestly in Tuesday morning trading.