Tesla to Upgrade Adapters on Reports of Garage Overheating

Jan 10, 2014 4:54 pm ET

(Updates with recall status, shares starting in the second paragraph.)

Jan. 10 (Bloomberg) -- Tesla Motors Inc., which is under investigation by U.S. regulators over fires in its Model S sedan after battery punctures, will upgrade wall-charger adapters following reports of overheating in garages.

The charger connectors, which tether Tesla-issued cables to wall outlets, will be mailed out in the next two weeks, Chief Executive Officer Elon Musk said in an interview today. The replacements will be treated as a recall, though owners won’t be required to travel to service centers. Overheating can stem from inadequate household wiring, he said.

“These are very rare events, but occasionally the wiring isn’t done right,” Musk said. “We want people to have absolute comfort, so we’re going to be providing them with an upgraded adapter.”

The decision to provide the improved part follows a series of about a half-dozen incidents, described on a Tesla-owner website and in some cases relayed to U.S. regulators, in which Model S wall plugs melted or smoked while vehicles were recharging. The redesigned adapter will include a thermal fuse designed to shut off charging if overheating is detected, Musk said.

Tesla fell 1.2 percent to $145.72 at 4 p.m. after earlier falling as much as 3.6 percent. The shares have plunged almost 25 percent from their peak in September after three reports of battery-related fires in the Model S in October and November.

The U.S. National Highway Traffic Safety Administration opened an inquiry Nov. 19 after the last fire.

Six Incidents

Tesla isn’t aware of any fires that have been definitively caused by its cables, electronics or vehicles, said Liz Jarvis- Shean, a company spokeswoman. The replacement adapters are expected to cost “a few million dollars” and have no material impact on earnings, she said.

The company in December sent a software update to its customers to deal with the recharging issue. The new software is designed to trigger a 25 percent reduction in charge current when it senses conditions that could lead to overheating.

The company isn’t aware of any overheating incidents since the software update, Musk said.

“We’re highly confident the software update addresses overheating issues,” Musk said.

Regulators Monitoring

At least six overheating incidents were reported on the Tesla Motors Club users forum website between March and December.

In October, one Model S owner reported that “plumes of smoke” came from his adapter, which fused to the charging cord. A York, Pennsylvania, owner reported burning his hands and arm trying to remove his charging cord after smelling melting plastic in December.

There are five reports of Model S cord and plug overheating in NHTSA’s consumer complaint database, including some of the incidents reported on the Tesla user website.

Tesla said its Model S and charging system didn’t cause a fire in a Southern California garage in November.

While there was a fire at the wall socket where the vehicle was plugged in, the car itself wasn’t burned, the Palo Alto, California-based company said in e-mailed comments.

Investigators couldn’t conclude whether the fire started inside the wall socket or was caused by the charger, and found it had nothing to do with the battery, the Orange County Fire Authority said last month.

Tesla has informed NHTSA of the overheating incidents, the software update and the new charger adapters, Musk said.

“NHTSA is monitoring reported fires associated with certain Tesla Model S charging cords and adapters and will take appropriate action as necessary,” Nathan Naylor, an agency spokesman, said in an e-mailed statement.

--With assistance from Angela Greiling Keane in Washington and Alan Ohnsman in Los Angeles. Editors: Bernard Kohn, Elizabeth Wasserman