Fact Checking Tesla's Safest Car Claim

About: Tesla, Inc. (TSLA)
by: Pale Blue Dot Research


Tesla claims Model 3 has the lowest probability of injury of any car.

NHTSA and critics contend that they don't rank cars.

NHTSA's own data supports Tesla's claim.

Credible Claim or adding fuel to the Fraud Narrative?

If Tesla's claims are right, they have manufactured the safest car on Earth. For shareholder's this expands the serviceable addressable market for Tesla to also include the safety conscious consumer and improves the company's growth story, competency, and capability. If Tesla is wrong this will legitimize the misrepresentation narrative that many shorts are banking on. The media is not helping to clear this up as many news outlets have simply regurgitated Tesla's press release at face value while others have raised skepticism without any further research. This leaves Tesla's credibility hanging in the balance. Let's dig a bit deeper and discover the truth.

Tesla's Claim

On Oct 8, Tesla posted to Twitter and published a blog post claiming, "Model 3 has the lowest overall probability of injury for any car ever tested by @nhtsagov."

(Source: Twitter)

The tweet was accompanied by a chart created by Tesla comparing the probability of injury of different vehicles based on published NHTSA data over the last 11 years. According to the graph below that the Model 3 is the only vehicle with a probability of injury lower than 6% followed by Model S and Model X at, or just below, 6.5%.

(Source: Twitter)

This relative comparison would naturally lead any reader to the conclusion that Tesla vehicles are the "safest ever". But what are the NHTSA tests based on?

The Tests

Tesla's blog post highlighted front impact, front pole impact, and side pole impact test results from the NHTSA, accompanied by short video clips of the tests themselves.

(Source: Tesla)

The videos provided by Tesla compare results to the Audi A4 and Lexus ES350 which are both similar in class and price to the Model 3 and more importantly, both hold IIHS Top Safety Pick Plus (TSP+) ratings, the highest available from IIHS.

In addition to those tests, the NHTSA also tests for roll over and side moving deformable barrier (MDB) impact as part of its New Car Assessment Program (NCAP).

NCAP conducts a total of three crash tests on new vehicles: one frontal and two side crash tests, as well as a rollover resistance assessment."

(source: NHTSA)

The tests measure various aspects such as intrusion into the cabin as well as force experienced by crash test dummies to various body parts. Some examples include deflection to the rib cage in mm, lower spine g-force experienced, and force on abdomen in Newtons.

This seems straightforward so why is there so much controversy?

NHTSA Statement and Critics

The day after Tesla posted its claim to its blog and twitter, the NHTSA released a statement on its website to distance themselves from any conclusions drawn from 3rd party analysis of the published results.

A 5-star rating is the highest safety rating a vehicle can achieve. NHTSA does not distinguish safety performance beyond that rating, thus there is no "safest" vehicle among those vehicles achieving 5-star ratings."

(source: NHTSA)

This was picked up by several news outlets like FOX, CNET, Business Insider, and Reuters, and quickly fueled a debate between shorts and longs in the comments section of Seeking Alpha's own article. (Source: Google)

The argument goes like this, if the highest rating the NHTSA gives is five stars, and many cars have a five star rating, how can Tesla claim to be the safest?

Fact Checking

Tesla responded to the NHTSA the same day according to Reuters.

Tesla said Tuesday its assessment was calculated using publicly available data, taking the weighted average of crash scores to calculate a vehicle safety score and then multiplying it by a baseline injury risk value.

(source: Reuters)

If the NHTSA only issues 5-star ratings and no ranking order the question becomes, how could Tesla possibly distinguish their cars from the others? How could they calculate a safety score other than 5-stars?

A close look at the actual NHTSA published data shows how Tesla's conclusion can be verified.

(Source: NHTSA)

This table is from the most recent data set released Sept 19. The first tab shows rollover testing which determines the likelihood of a rollover. Note there are measurements contained within this table that are being used by the NHTSA to calculate the probability of a rollover that clearly show differentiation between vehicles.

As for the data itself, SSF stands for Static Stability Factor, basically how stable the vehicle is so the higher the number the better. P(roll) and P(AIS3+) are the probability of a serious injury according to the Abbreviated Injury Scale. We don't need to go into more detail there but the lower the better. The RRS is the Relative Risk Score which is a weighted score based on the previously mentioned measurements. The lower the better.

Any probability (columns G and H) of 10% or less gets a 5-star rating but that does not mean there is no difference between one 5-star rating and another because a 5% chance and 10% chance are quite different.

The rest of the tabs contain similar measurements and probability or risk of injury in each of the test scenarios, front, side MDB, and side pole impacts. This brings us to the last tab which gives us the overall score and ratings.

(Source: NHTSA)

The column worth noting is the Combined VSS which as you can see from the formula bar in the table is the weighted score of the front impact, side pole and rollover tests. All three of those results include the risk of serious injury also referred to as AIS 3+ in the data. This means the combined VSS is the weighted score for the likelihood of serious injury in that vehicle in those scenarios. So how do these scores relate to the rating?

5-stars (meaning 10% or less chance of serious injury)
4 Stars (meaning 11-20% chance of serious injury)
3 Stars (meaning 21-35% chance of serious injury)
2 Stars (meaning 36-45% chance of serious injury)
1 Star (meaning 46% or greater chance of serious injury)

(source: Auto-evolution)

In a nutshell, the VSS is the vehicles numerical stability score while the 5-star rating reflects the likelihood of injury as a percentage range. According to Tesla all they did was take the NHTSA weighted average of all the probabilities of injury for the various tests, which is how they ended up with less than 6% for the Model 3. According to the NHTSA tables this is correct.

The NHTSA comment about 5-star ratings is correct in that the 5-star rating does not distinguish between probabilities between 0%-10% but the data is still there to support Tesla's claim of less than 6% probability of injury which is lower than any other vehicle. The VSS score also allows us to rank the Model 3 in order of safest vehicle even when compared to other 5-star vehicles.


Tesla made a claim that was met with skepticism and mistrust, as is common with many of Tesla's claims. Determining if there is truth to these claims is integral to determining the credibility of the company when it reports other statistics and numbers such as production, deliveries, and reservations. The NHTSA's remarks about 5-star vehicles being the same is misleading. A granular look at the data shows real differences between 5-star vehicles which supports Tesla's claim that the Model 3 has the lowest probability of injury. For shareholders this is good news because Tesla now owns the safety crown and can take a share of the popular SUV segment by appealing to those buyers that feel the need to choose over-sized SUV's strictly for safety reasons.

Disclosure: I am/we are long TSLA.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.