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Real Time Insight

Yesterday I had the pleasure of getting behind the wheel of the Model S, the electric car that has caused a big sensation. After recommending Tesla (TSLA - Analyst Report)) (at $38) and owning the stock (at $150), I thought it was high time to see what the real product is like.

First I should start out by saying that my wife and I have a 2010 Volvo S40 or C60 or something like that. I despise the fact that it’s a stick shift, as it makes no sense to me living in the city of Chicago to constant have to change gears. My wife wanted that car, so we got it. Yes, she ultimately calls the shots while making me believe I have a say in what happens. She is pure genius.

The Right Spot

Our test drive started out in the show room which is located in the Old Orchard mall in the suburban Chicago of Skokie. It’s a great mall with higher class stores. A great spot for affluent buyers of the Model S.

Inside the show room was a Model S that may or may not be real... and a cut away of the car to show where the suspension, motor and batteries reside on the floor of the car.

After logging in on an iPad, and accepting some terms of agreement - which I never read - we headed out to the car that was waiting for us. It was just the color I wanted, scarlet... I mean red. I just think Scarlet due to my affinity for the Ohio State Buckeyes. What luck, I thought to myself.

Mega Touch Screen

The door handles slid out from the car as we approached, a neat feature that reduces drag. We spent the next 10 or 15 minutes attempting to get used to the massive 17 inch touch screen. Google maps with integrated traffic monitors, the ability to go to any website (that doesn't show video) and the ability to make phone calls. Tesla gives each car a 3G satellite connection to make the calls and download data. It’s free now, but when 4G becomes the standard our salesperson noted that the policy could change.

Along with the power consumptions screen, we selected the rear view fish-eye camera for the lower portion of the screen. This rear view camera basically negated the idea of the blind spot, as I could easily view the cars on each side of me as well as directly behind me. This was an impressive feature.

The Electric Slide

Pulling on to the road, I notice the immense power this car had, but as much as it had torque or pickup or whatever you want to call it, it also had a huge drag when your foot was not on the accelerator (don't call it a gas pedal!). The idea there is battery regeneration, basically using the forward motion of the car to create more energy that can be used to propel the car forward later. This took some getting used to, but I could see why it was being used. The idea of coasting in neutral with a stick shift is not anything like when the “regen” is in full effect. You slow down almost as dramatically as you speed up in the Model S, which makes coasting into a red light a no brainer (thus saving the battery and the brakes).

As I entered the highway, I immediately saw a Corvette next to me and a slight push of the pedal and we were neck and neck. Only the fact that traffic prevented me to procedure further allowed the 'vette hold a small lead on me. I did push the car up to 81 MPH, and I must say, it felt the same as it did at 60 MPH.

Handling was fine and rest of the ride was as you would expect from a luxury automobile. At one stop sign the sales rep told me to floor it to see what the acceleration from a standstill was like. I probably went from 0-50 in 2 seconds, maybe less, but you could feel the G forces push you back into your seat. My wife and I commented that it was almost dangerous to have that much power... yet very exciting.

The sales rep noted that the weekdays are less busy, but the weekends are booked solid with people test driving the Model S. Most are just day dreamers, but some are buyers.

Overall, the test drive validated what I have been seeing on YouTube from owners and other statements about the car that I have read online. It is a thing of beauty and power, and the cost to "fill the tank" runs about $7-$9 on electricity vs. the price of gas. The “regen” idea also means that a conservative driver will see brakes last at least twice the length they would on a normal car.

The Stock

So all that is fine and dandy, but what about the stock?

Does a test drive of an incredible car make you want to buy the stocks? I can tell you it does for me. Do you think you would have the same reaction after a test drive of the Model S?

To me, this becomes a valuation and valuation only type play in the stock. The product is undeniably impressive. The question is at what price growth? And what growth rate would the company need to support its current price or will the inevitable doubling of production next year mean the stock doubles in price?

Honk your own horn and let us know in the comments below!

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These 7 were hand-picked from the list of 220 Zacks Rank #1 Strong Buys with earnings estimate revisions that are sweeping upward. Their stock prices are expected to rise sooner than the others.

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