Tesla Motors is looking to fix its Model S sedans in an attempt to prevent a long investigation by the National Highway Traffic Safety Administration that could eventually lead to a recall.
Company CEO Elon Musk said this week on his blog that Telsa has made a software adjustment to its Model S sedan so it "won't ride as low to the ground" at highway speeds, according to Bloomberg Businessweek.
Musk feels the adjustment reduces the risk of battery packs being punctured and catching fire after being hit by objects on the road. His blog post came the same week the NHTSA announced it would be investigating the Model S after two fires occurred in under eight weeks in the U.S.
If safety regulators decide to reject the software fix, they could force Tesla to install a thicker barrier of stronger metal or aluminum in the Model S. This would be a costly decision for the California-based company.
"Compare the skid plate on a SUV or a pickup," Dave Sullivan, an analyst at AutoPacific Inc. said, according to Bloomberg. "Those are all made from steel today, very thick-gauge steel, and they protect the underbody components, whether it's transfer cases or oil pans. Nobody makes any of those things from aluminum. They're just not as durable."
Tesla shares dropped 3.5 percent to $121.71 in New York at 11:02 a.m. after increasing on Nov. 19 when the investigation was first announced. Shares had fallen 35 percent since reaching a closing peak of $193.37 on Sept. 30, the day before the first fire, according to Bloomberg.
Musk said last week that a recall definitely won't happen, but then a few days later he claims the company was the one who asked the NHTSA to open its investigation. Not everyone is buying Musk's claim however.
"The notion that a manufacturer would ask the agency to open a formal investigation is so unusual as to defy credulity," said Allan Kam, a safety consultant and former senior enforcement attorney with NHTSA, said according to Bloomberg. "The meat doesn't come to the grinder."
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