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If you haven't yet heard: Motor Trend magazine crowned Tesla Motors (Nasdaq: TSLA ) Model S sedan the "2013 Car of the Year." That's a remarkable feat, although Tesla enthusiasts, myself included, are anything but surprised.
I test-drove the Model S with my mom last month in Ft. Lauderdale, Florida. After an exhilarating 30-minutes behind the wheel, she bought one on the spot. I could run through the impressive specs, like zero to 60mph in 4.3 seconds but, until you experience Tesla's Model S for yourself, no amount of colorful adjectives will do it justice.
The academy award of autos
This is the first time in its 64-year history that Motor Trend has awarded Car of the Year to an electric vehicle. The fact that it was a unanimous vote is also a first.
BMW's 3-series was in the running, with high-marks for its ride-handling balance. Ford's C-Max Hybrid and Ford Fusion were also finalists -- earning numerous accolades in affordability and fuel efficiency. But in the end, it was Tesla's Model S that stole the show. Automobile Magazine's editor-in-chief explains:
It's the performance that won us over. The crazy speed builds silently and then pulls back the edges of your face. It had all of us endangering our licenses.
From one of the most advanced electric powertrains on the planet to an interior adorned with a 17-inch touchscreen display -- think two iPads -- the Model S is a game changer. But with innovation comes disruption, which, in Tesla's case, isn't going over well with traditional auto dealers.
The Apple approach to selling cars
With the help of George Blankenship, Tesla is changing the rules of retail. If that name sounds familiar, it's likely because Mr. Blankenship, along with Steve Jobs, were the masterminds behind Apple (Nasdaq: AAPL ) retail stores. Today, Blankenship is leaning on his six-year history as Apple's real estate chief to help reinvent the car-buying experience.
Tesla is opening mall stores around the U.S. to showcase display models of its upcoming gas-free cars. However, not everyone is happy about the company's revolutionary retail strategy. Last month, auto dealer groups in New York and Massachusetts sued Tesla for violating so-called state franchise laws. But the fun didn't end there. Tesla CEO Elon Musk fired back in a blog post saying:
Existing franchise dealers have a fundamental conflict of interest between selling gasoline cars, which constitute the vast majority of their business, and selling the new technology of electric cars. It is impossible for them to explain the advantages of going electric without simultaneously undermining their traditional business.
By taking the road less traveled, Tesla will be able to better educate the public about the game-changing technology behind its all-electric cars. One important stipulation is the fact that Tesla's new retail stores aren't necessarily selling the vehicle but, rather, taking reservations. Making a reservation requires a down payment of $5,000, though it's fully refundable at anytime before the car is delivered to a buyer.
Over the long run, I doubt these lawsuits will hold up. More than this, I think that modeling its showrooms after Apple's retail concept is a winning strategy that will eventually pay off for Tesla. Let's be honest: The traditional franchise dealership model is outdated. With its latest achievement in Motor Trend, the attention is shifting back to where it belongs -- on Tesla's innovative technology.
Ready for primetime
If nothing else, winning Motor Trend's Car of the Year proves that Tesla is ready to take on the mass market. The company's Model S topped the charts in all six categories, which included performance, engineering, efficiency, safety, value, and advancement in design. More importantly, now that Tesla's cars have demonstrated they have staying power, I suspect the stock will shortly follow.
If you have money that you can afford to invest for the next three to five years, I encourage you grab a piece of Tesla Motors. The stock may be up more than 10% year-to-date, but I suspect it has a lot more to run as the company approaches profitability. For those with less faith in the EV market, perhaps a stock like Ford is more your style.
Ford has been performing incredibly well as a company over the past few years -- it's making good vehicles, is consistently profitable, recently reinstated its dividend, and has done a remarkable job paying down its debt. But Ford's stock seems stuck in neutral. Does this create an incredible buying opportunity, or are there hidden risks with the stock that investors need to know about? To answer that, one of our top equity analysts has compiled a premium research report with in-depth analysis on whether Ford is a buy right now, and why. Simply click here to get instant access to this premium report.