A third incident in six weeks has been reported involving a Tesla Model S car catching fire after a traffic accident

Tesla Motors shares plummet after third fire in six weeks

Another Tesla Model S car ignited on Wednesday, supposedly due to an accident, sending the company’s shares down by about 7 per cent.

Tesla Motors, the pioneering electric car company owned by PayPal and SpaceX billionaire Elon Musk, said it was investigating the incident though nothing seemed to suggest the ignition was spontaneous and was most likely a result of an accident.

"Our team is on its way to Tennessee to learn more about what happened in the accident," Tesla spokeswoman Elizabeth Jarvis-Shean said in a statement. "We will provide more information when we're able to do so."

The Tennessee Highway Patrol said the incident occurred on Interstate 24 in Smyrna around 1:30 pm.

"It's possible that it ran over a piece of metal in the roadway," patrol dispatcher Kathy Bryant said. "There was extensive damage."

The police report did not say how fast the 2013 model year car was traveling, but the driver was able to pull off the roadway and get out of the car.

On Tuesday, Tesla forecast a weaker-than-expected fourth-quarter profit and posted third-quarter Model S deliveries that disappointed some analysts.

The first Model S fire occurred on 1 October near Seattle, when the car collided with a large piece of metal debris in the road that punched a hole through the armour plate protecting the battery pack. US safety regulators at the National Highway Traffic Safety Administration later said they found no evidence to indicate a vehicle defect.

The second fire took place later in the month in Merida, Mexico, when according to reports a car drove through a roundabout, crashed through a concrete wall and hit a tree.

Neither of the drivers was injured in the earlier accidents and in all three cases the company said the owners have asked the company for replacement cars.

After the first fire, Tesla Motors CEO Elon Musk defended the safety performance of electric cars. "For consumers concerned about fire risk, there should be absolutely zero doubt that it is safer to power a car with a battery" than a conventional gas-powered vehicle, he said in a blog post.

Company executives called that first fire a "highly uncommon occurrence," likely caused by a curved metal object falling off a semi-trailer and striking up into the underside of the car in a "pole-vault effect."

At the time, Musk did not say if Tesla would make any changes to the Model S battery design as a result of the first accident. Jarvis-Shean had no immediate comment when asked if such changes were being considered.

Tesla's shares fell as low as $140.50 on Nasdaq.

Since the first fire, Tesla's shares have fallen more than 26 per cent and this week's declines are the worst one-week drop since May 2012.

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