Source: http://money.cnn.com/2013/10/04/news/companies/elon-musk-model-s-fire/index.html

Last week, videos of a Tesla Model S car catching on fire went viral around the Internet. As a result of this, Tesla Motors Inc’s shares have dropped 6 percent, knocking almost $3 billion of the company’s market value. According to Elon Musk, the CEO of Tesla Motors, the fire only started because of a large metal shape object on the road. The large metal object punched a 3-inch hole through an armour plate that protects the battery under the passenger compartment, and sparked a flame. In the US, around 190,000 vehicle fires occur each year. Less than 1 percent of the cars sold in the U.S. are electric, which shows the unlikely odds of this happening.

The Model S was not rated only a 5-star safety rating in every subcategory, but was also listed as the most popular pure electric vehicle in the United States. Ever since this video, there have been huge declines in sales, as well as a lot of negative publicity in the media. This incident shows how important brand reputation is in relation to the stock market. The power of choice that consumers have greatly impacts the company’s market value in the market.  It’s good for a brand to uphold a strong reputation that can withstand unexpected occurrences. I’m really curious to see how Tesla Motors will respond to this situation and what they will do to gain back their losses.