Fiery Tesla crash torpedoes stock price

Skittish investors in high-flying Tesla, maker of expensive electric cars, bid down the company's stock price 4% Monday after reports that a Tesla model S burned after slamming into a concrete barrier and a tree in Mexico.

Tesla noted that the driver was unhurt in the Oct. 18 wreck near Merida, Mexico, which the automaker says should be viewed as a demonstration of the car's high level of crashworthiness rather than any inclination to catch fire.

It was the second high-profile Tesla fire.

An accident Oct. 1 in Washington state caused a Tesla Model S to catch fire after debris punched into the car's lithium-ion battery pack.

That driver was unhurt. The National Highway Traffic Safety Adminstration has said it found no evidence of a defect or violation of safety regulations in that incident.

Tesla says both drivers have told the company they want to buy replacement Model S cars.

As well as being vulnerable to crash damage -- just as many ordinary auto components would be -- the lithium-ion batteries that power electric cars are especially sensitive to temperature. If improperly cooled, they could ignite.

Non-crash fires have been reported in two Mitsubishi electrics. Chevrolet's Volt caught fire after being stored following a government crash test. Chevrolet says the vehicle was improperly stored and handled, and that the crash itself didn't directly result in the fire.

Recent, infamous cases involve Boeing 787 Dreamliners, which use lithium-ion packs. Those planes were grounded in January after fires. The battery systems were modified and the planes are flying again.

A 2006 recall of millions of Sony laptop computer batteries because of fire risk triggered modern concern about lithium-ion battery fires. The car and airliner events have kept the nervousness bubbling.

The Tesla Model S earned 99 out of a possible 100 points in Consumer Reports tests,prompting the publication to say, "The Tesla Model S...is not only the best electric car we've te! sted, it's now our top-rated model overall."

The Tesla fire reports, published Monday, could have been the last straw for some Tesla investors. The stock closed at $162.86, down $6,80, or 4%.

Tesla CEO Elon Musk said in a Bloomberg TV interview last week in London, where he opened a showroom, "The stock price that we have is more than we have any right to deserve." He had issued a similar warning in a summer TV interview.

The stock trades at around 100 times projected 2014 earnings, a huge ratio that means investors expect fat, fast growth. More typical would be a forward P.E. of 10 to 20 times projected earnings, though the ratio varies considerably depending on industry.