Paul Kedrosky writes:
Curious if you’ve looked at the current debate about Tesla fires, statistically speaking. Lots of arm-waving about true/sample proportions, sample sizes, normal approximations, etc.
Would love to see a blog post if it intrigues you at all.
I hadn’t heard about this at all! I mean, sure, I’d heard of Tesla, this is an electric car being built by some eccentric billionaire. But I didn’t know they were catching on fire! At this point I was curious so I followed the link.
It was an interesting discussion to read, partly because some of the commenters were so open about their financial interests; for example,
i felt like now is a good time to share some of my insights, specifically regarding the tesla fires. i know many people won’t like to hear what i have to say. and i don’t have a longer term holding in tesla any more, although sometimes i day-trade tesla from the long or short side. tesla has been kind to me, both as an investor and model s owner. so although i have been very tempted to short tesla the past months, i just can’t bring myself to establish a meaningful short against the company that has been so good to me as a customer and investor. who knows, maybe i will lose my sentimentality and return to being the cold-blooded capitalist i usually am.
I love the idea that someone thinks that day trading is “being a cold-blooded capitalist,” but that’s another story. . . . What’s unusual in this discussion is how openly people are stating their financial and emotional interests here.
After reading some of the thread and googling a bit, I don’t think I have much to add that goes beyond this news article and this one by Kevin Bullis. We’re talking about a rare event: specifically, a car catching on fire after a collision. In which case it seems like the overwhelming risk comes from the crash, not the possibility of fire.
What interests me the most about all this is that it ultimately seems not so much like a discussion of added risks (which, everyone seems to agree, are tiny, to the extent that they exist at all) but rather more of a meta-discussion about risk perception. The argument is not that the Tesla car is dangerous but rather that it will be perceived as dangerous, thus dropping its inflated stock price etc. It’s an argument and a meta-argument at the same time.
P.S. I was in a car that caught on fire once! It was a Subaru, I think. We were on the highway outside Baltimore and noticed that some other drivers were pointing at our car as they zoomed past. After pulling over, we noticed smoke coming from under the hood. It turned out we’d forgotten to put the cap back on after filling the oil tank, and there was a small fire burning on the surface of the oil. We waited for the fire to go out and then drove slowly to a gas station.