Tesla's Model S. Photo credit: Tesla Motors.
The automotive industry has been using internal combustion engines to drive vehicles for more than a century, and the industry was begging to be disrupted by an innovative solution. Some have dubbed electric vehicles the ride of the future, but the likes of Ford's (F 0.17%) Focus Electric and Nissan's Leaf leave something to be desired.
Then something happened – Tesla's (TSLA -3.55%) Model S took America by storm. People aren't even sure how to classify it. Is it a sports car, a luxury car, an electric car, or all three combined? Whatever it's classified under, there's no mistaking that this could be the greatest American-made car ever. Here's why.
Performance
Tesla's Model S performance delivers in a multitude of different ways. First, it delivers more driving range than the Leaf and the Focus Electric combined.
Graph by author. Information credit: Consumer Reports.
The extended driving range will enable Tesla to build out its supercharger network wider and faster in the months and years to come. In a few short months it will already be possible to drive a Model S between our nation's major metro areas and even diagonally from L.A. to New York.
As far as driving performance goes, Tesla's Model S could definitely be considered a sports car, with its top-spec model accelerating from 0 to 60 in 4.2 seconds. To put that in comparison, a 2001 Lamborghini Diablo VT 6.0 does 0 to 60 in the same 4.2 seconds. The Model S is even quicker to 60 mph than Porsche's 2013 911 Carrera, which takes 4.3 seconds.
Typically, we don't associate lightning-quick sports cars with being safe -- and that's something that separates the Model S yet again. It recently earned a five-star safety rating from the National Highway Traffic Safety Administration, or NHTSA. It topped the list in every subcategory, and its overall Vehicle Safety Score achieved a new combined record of 5.4 stars, according to Tesla's press release. This might not only be the greatest American-made car ever, but it could also be the safest.
I'm not the only one insanely impressed by the revolutionary EV. Motor Trend unanimously voted the Tesla Model S as its "2013 Car of the Year." Consumer Reports said the flashy EV is "off the charts" and gave it a stunning 99 out of 100 points in the magazine's tests -- one of the highest scores it's ever given.
With a vehicle so far ahead, it's created giggle fits during Tesla conference calls, when comments regarding competition arise. With such an innovative and successful product that seems to have a ridiculously bright future, this could be a once-in-a-generation investment opportunity, right?
Perhaps, but let's dig in a little first.
Investment takeaway
Investors have been climbing over each other to get into this stock before and after the company posted its first-ever quarterly profit. Look at the stock's performance this year.
That increase no doubt makes it one of the hottest stocks and stories on the market -- and it's really just scratching the surface on its potential. As the supercharger station buildouts expand, and as the company works toward producing a cheaper vehicle for the masses, the stock could continue its upward momentum. Even before its mass-produced vehicle arrives, sales of the Model S are expected to nearly double next year. The Model S has already captured 8.4% of the luxury market and has barely been selling for over a year -- compared with some luxury automakers that have been selling for decades.
However, there is a lot of risk with a stock that has soared so high, so quickly. As the market for EVs grows, there are juggernaut companies such as Ford, General Motors, Toyota, and Honda that will dump hundreds of millions into R&D to make their EVs much more competitive. Right now those automakers are a long way off, but they aren't going to give up anytime soon.
Tesla's products are revolutionary, but the road ahead for its stock price will be filled with bumps. If you buy into Tesla, now you'd better be patient enough to hold for a decade at least.
