Every hour, there are an average of 17 automobile fires somewhere in the U.S., according to government data. Mechanical failure in internal combustion engines cause the majority, and burning cars filled with gasoline result in more than 200 deaths per year. Yet far more attention is being paid to one all-electric Tesla Model S that caught fire on October 1 after metallic debris pierced a module in its battery pack. The driver of the car walked away. A video of the fire went viral online this week.

A lithium-ion battery fire is different from a gasoline fire, because lithium and water can be explosive in combination. Much as one should not fight a grease fire with water (but rather smother it), one should use alternative means, such as chemical sprays, to put out an electric car fire. Yet the firefighters on scene used water at first to attempt to douse the Model S flames, thereby intensifying them. Extinguishing the fire required cutting into the frame of the vehicle in order to reach the embedded battery pack and dousing the cells with flame-snuffing chemicals, according to the firefighters' report.

The Tesla Model S remains a car that garnered the highest safety rating possible from the National Highway Traffic Safety Administration in testing earlier this year. And electric cars, thanks to government financial support, have doubled the total sales of all hybrid vehicles, such as the Toyota Prius, in their first years of availability—more than 110,000 Chevy Volts, Nissan LEAFs and others have sold since their introduction in January 2011. Tesla Motors hopes to sell some 21,000 Model S EVs this year and the vehicle is already the best-selling electric car. It has captured more than 8 percent of the total luxury market in the first half of 2013, surpassing conventional luxury cars like the Audi A8, BMW 7-series and Mercedes S class. There are already 13,000 Teslas on the road in North America, and only one has ever caught fire in an accident.

While extolling the virtues of Tesla Motors at an event at Columbia University on August 26, U.S. Secretary of Energy Ernest Moniz joked about the riskiness of the government's now repaid $465-million loan to the electric carmaker, noting that the loan was made in the same month that General Motors declared bankruptcy. "It was a risk," he said. "Now Tesla is looking today like a great success…[although] it's a little bit pricy for some of the people in this room." The Model S starts at roughly $68,000 for a car with the smallest, 60 kilowatt-hour battery pack, which is rated for roughly 210 miles of range.

Even at that price it is the California pollution credits that Tesla sells to other automakers there that boosted the company into profitability for the first time in its decade long existence this year. And EVs overall are certainly not on track to meet goals such as 75 percent of U.S. vehicles being electric by 2040 or the Obama administration's one million electric cars on the road by 2015. "We are competing with a technology [internal combustion vehicles] that has been in the market and improving in the market for a century," says Jonna Hamilton, vice president of policy at the Electrification Coalition, an electric car industry group. The electric car may find itself only a niche product, rather than a replacement for conventional cars moved by internal combustion—even if EVs are safer overall.

Driving experience

The 400-horsepower electric engine perched above the rear wheel makes it dangerously easy to accelerate in the Model S, although a software governor currently imposes a top speed limit of 130 miles per hour. "You can zip around, but it's almost better for just a comfortable drive at the speed limit," one satisfied Tesla owner tells me at a mall-charging station while chatting on what Tesla marketing manager Ted Merendino calls "Tesla time.” He adds, "Our customers are our best sales people."

The Model S is a giant, upgradeable computer on wheels, a pioneer charting out new terrain as cars become more and more computerized. One of the key transformations Tesla has introduced is the ability to upgrade the battery pack and the software of the car, essentially delivering a new car experience in an old car frame. In addition, a 17-inch touch screen in the center console points to a future of computer–human interaction, although one that may allow for too many driver distractions ranging from radio to GPS route-plotting. The occasional crackle of wireless interference sounds like a clock-radio alarm picking up the radio waves from a cell phone and leads one to wonder what it would take to crash the Tesla Model S computer—and then the car. It's also easy to see how a Tesla could be turned into a driverless affair, and Musk says his company is working on the technology for a computer autodriver much like Google’s.

Regardless, computers—and EVs—need power. Some 59 miles of driving on the highway and twisting mountain lanes uses up 22 kilowatt-hours with an average energy of 377 watt-hours per mile, during a recent test drive. Plugging into a conventional Tesla slow-charger only adds back 10 miles of range in 20 minutes or so. Parked at the fully packed charge spot at a local mall where five Teslas vie for two cords, the car attracts comments from passersby as well as cellphone pics.

That's because the car is perceived as cool and "green," no matter what color the paint job. But how green can an electric car be? In a place like Paris or the Pacific Northwest, where much of the region’s electricity comes from nuclear or hydropower, respectively, the Model S or Roadster can tout itself as a near–zero-emission vehicle. In large swathes of the U.S., where more electricity comes from coal and natural gas than nuclear or renewables, that is a harder claim. And in China—where Tesla will be sold as Tuosule, thanks to a previous trademark on the name—the luxury car will be more polluting than an efficient conventional gasoline or even diesel car because the bulk of China's electricity comes from burning coal. And then there's all the potential pollution associated with manufacturing the car's lithium ion batteries.

But for day-to-day expenses, the electricity to charge a Tesla is cheap compared with the roughly $2,000 a year the average U.S. family spends on gasoline—a mile driven on electricity costs roughly 3 cents compared with 12 cents for gasoline, according to Energy Information Administration data.

New directions

In order for Tesla Motors to survive and thrive it must make more cars, more profitably. "What continues to work for us in terms of exciting the public is getting butts in seats," says Tesla's Diarmuid O'Connell, vice president of business development, who notes that the company makes a 25 percent gross margin on each Roadster sold, excluding other revenue. "That has always been the goal with the Model S program, too."

Next up for Tesla is the Model X, described as a "crossover" by auto industry types but somewhere between a minivan and a sport-utility truck for the uninitiated. That follows the progression of Tesla's business plan from a car produced in small numbers at a sky-high price (the Roadster) to cars produced in middling volumes and at a luxury price (the Model S and Model X SUV in 2014) to a car produced in large numbers at a lower price (a sedan forthcoming in 2017 or so, which is aiming for a cost around $30,000). Tesla also sells the electric power train it developed for the Model S to Toyota and Mercedes, a business that brought in nearly $4 million this year.

One key component of any price reduction will be drops in the cost of batteries, where Tesla has an advantage because it uses the same lithium ion cells used in the vast array of consumer electronics, where such batteries have also faced fire troubles occasionally. "There are billions of research dollars pouring into the space and also the infrastructure to manufacture cells," O'Connell says. Already, between 2008 and 2012, the cost per kilowatt-hour of lithium ion batteries dropped by half to roughly $500. That said, delivering the hundreds of thousands of batteries Tesla would need if successful at making tens of thousands of cars and battery packs may prove a challenge.

Tesla's latest idea is to design a battery pack that is swappable in 90 seconds, a kind of rapid recharging in the form of replacement, including quick disconnects for the battery’s liquid-cooling radiator system. Or customers can use Tesla's 23 supercharger stations to regain at least 240 kilometers of range in 20 minutes.

The software upgrade potential built into Teslas may allow them to escape the fate of their eerily similar predecessor from 1948: Tucker. Only 51 of those innovative cars were made in Chicago before that company folded. As it stands, Tesla may make and sell more than 20,000 Model S units this year alone. "There's a reason why everything we do is so hard," explained George Blankenship, Tesla's vice president of sales and ownership experience, at an event to extol the new car in New York City in November 2012. "It's because everything we do is impossible."

The best part of the Tesla experience remains cruising silently past gas stations touting fuel at $4 per gallon. That's a feeling founder Elon Musk himself hopes to experience during a planned cross-country road trip with his family this fall in his personal Model S, where the billionaire's children like to sit in the rear-facing third-row seats. The downside is that returning from the electric future to the gasoline past inspires a lead foot that burns through gasoline even faster.