What went down

Tesla (NASDAQ:$TSLA) has gained 4.72% at market close on Tuesday, and just about 70% for the year. The move that investors celebrate is primarily enforced by the announcement of the Model X being award the highest SUV safety rating ever by the NHTSA (National Highway Traffic Safety Administration).

Why it matters

With a 5 star rating in every category and subcategory from the NHTSA, Tesla has built the safest SUV ever known to man. Tesla explains in a blog post, “That means that in the event of a serious crash, Model X occupants have an overall 93% probability of walking away without a serious injury – a testament to our commitment to building the safest cars on today’s roads,”

The Model X performs better than it’s peers predominantly due to its powertrain and overall design. The fortified battery pack that powers the vehicle is securely bound to the bottom of the SUV, resisting against rollovers due to it’s lower center of gravity. This is one issue that many traditional SUVs have been unable to address. In fact, no car has been deemed more safe, except for Tesla’s flagship sedan, the Model S.

Another trigger that facilitated Tesla’s share price increase was an optimistic turn from Alexander Haissal, an analyst on Wall Street. Haissal expects Tesla to reach $464 in the next 12 months which represents an almost 30% upside from the current stock price.

In notes to clients, Haissal wrote, “Tesla’s disruptive potential encompasses the vehicle, the entire production process and the product-to-market strategy. Once the business reaches scale, the cash generation potential is significantly superior to existing premium OEMs.”

Now what?

Tesla’s production potential will be tested as it is set to roll out its Model 3 vehicles to the market next month (July). With production goals to produce the Model 3 at 5,000 vehicles per week by the end of 2017, only time will Tell if Tesla can achieve its expectations.

Featured Image: twitter