The Tesla Model S Is the World's Best Car, for Now

Tesla Motors' (NASDAQ: TSLA  ) Model S is raking in the awards and accolades across the board. The company's performance is incredible, the safety ratings are best in class, and it's beloved by consumers. But is the stock as great a buy today as the car? In this video, Motley Fool analyst Austin Smith looks at the biggest problem facing Tesla stock today: The market already knows what a great car this is, and it has made the stock a very pricey meatball indeed. Austin examines what kind of upside might be left for Tesla investors who buy today.

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  • Report this Comment On August 24, 2013, at 12:50 PM, Grumpycat wrote:

    Here's an article that was just published about the recent safety test that Musk was bragging about.

    "is the Tesla Model S really the safest car on the road?

    One key fact went unnoticed this week as Tesla Motors Inc. trumpeted its "best" crash-test rating in the media: The federal government doesn't test most other luxury cars.

    So the Model S may be safer than many cars costing far less. But whether it's safer than direct competitors from BMW, Audi and Mercedes-Benz — considered among the safest cars available — remains a mystery.

    What's more, the federal safety regulators privately reprimanded the automaker for publicly claiming the Model S scored better than any other car, according to a source familiar with the discussions. In fact, Tesla is among seven cars since 2011 that received the highest rating in all categories, according to the National Highway Traffic Safety Administration.

    Knowing safety is a top consumer priority, automakers often use crash-test data to hype their vehicles. But the tests are just one measure of safety and can often provide a skewed picture, experts say.

    "Safety in the tests is different than safety on the road," said Clarence Ditlow, director of the Center for Auto Safety, an independent advocacy organization.

    Crash tests only measure the damage after things go horribly wrong.

    Say you are driving a Model S at 35 mph and look down at a text on your phone and — bam! You've just rear-ended a car. The 4,800-pound car, with big crumple zones to absorb the impact, sustains major damage but protects you from injury.

    Take the same scenario in a Mercedes-Benz S-class, a big German sedan that competes with the Tesla. You look down at the text and suddenly feel your brakes slam — even though your foot is still on the gas. You stop before hitting the car.

    That's because the Mercedes, like many other luxury cars, is equipped with forward collision avoidance sensors with automatic braking, a feature Tesla doesn't offer.

    "Tesla clearly does the best overall in the test-crash scores," Ditlow said. "But when you put that car on the road, I suspect it will do poorer than a car like the Mercedes."

    Ditlow lists a host of other Mercedes technologies that prevent accidents but don't appear in test-crash data. Adaptive cruise control tracks the speed of cars ahead and maintains a safe distance. Another system alerts the driver when the car is about to stray from its lane. Headlights automatically adjust to better illuminate the road.

    The Model S doesn't have those features but Tesla may look into integrating them in the future, said Shanna Hendriks, the Palo Alto electric-car company's spokeswoman. "We believe the impact active safety features have on a car's overall safety is marginal," she said.

    The Insurance Institute for Highway Safety disagrees. Forward collision systems with automatic braking have cut property damage claims on some Mercedes and Acura models 14%, according to the institute, an industry research group that operates its own testing program.

    More important, they cut bodily injury claims, made when the insured hurts someone in another vehicle, by 16% in the Mercedeses and 15% in the Acuras.

    Another way to judge safety is the number of deaths in a particular vehicle. For model years 2005 through 2008, death rates tracked over three years ending in 2009 ranged from a high of 143 per million cars in the Nissan 350Z to zero for seven different models.

    The models with no deaths included the Audi A6, the Mercedes E-Class, the Toyota Sienna, Ford Edge, Nissan Armada and two Land Rovers.

    In real-world driving, both the Model S and the Mercedes provide "supreme safety" thanks to their hefty mass, passenger-protecting crumple zones and other features, said Jeff Bartlett, a Consumer Reports automotive editor.

    "Dramatic accidents that might set them apart would be so rare," Bartlett said.

    But crash-test comparisons simply aren't available for most luxury cars."

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