After its Model S electric car was cleared of any defect in a German review following the three recent fires and two analysts said the events wouldn’t hurt the business, Tesla’s stock soared 16.5%, its biggest one-day gain in almost four months.
As we Tesla, whose Model S is being investigated for a possible U.S. recall, was asked to provide technical data to the German Federal Motor Transport Authority after three recent crashes involving the car that ended in fires, according to a company statement. The German agency, like the U.S. National Highway Traffic Safety Administration, has authority to request recalls if a defect is found, Tesla said. And the Californian company was happy to report that no such defect was found.
Tesla closed today at $144.70, up $20.53 from Monday’s close.
“We believe negative news flow on Model S fires, while clearly disruptive to the stock’s momentum, will not cause material damage to the business,” Adam Jonas, a Morgan Stanley analyst in New York, wrote in a note today.
Tesla, led by billionaire entrepreneur Elon Musk, has been the world’s fastest-growing auto stock this year as the company expanded sales of its Model S sedans, priced from $70,000 to more than $100,000. The shares tumbled in the past month as Tesla posted third-quarter results that trailed some analysts’ estimates, amid reports of the crash-related fires.