This Tesla Boost is Added Pain for GM and Toyota

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It is becoming increasingly difficult to call Tesla Motors (NASDAQ:TSLA) an underdog. Shares are up over 17 percent in the last month on a series of good news coming out of the electric vehicle manufacturer. For its most recent milestone, the company claimed Motor Trend’s 2013 Car of the Year for the Model S.

“Our aspiration with the Model S was to show that an electric car truly can be better than any gasoline car, which is a critical step towards the widespread adoption of sustainable transport,” chief executive Elon Musk said in a statement. “Nothing illustrates this more clearly than winning Motor Trend’s Car of the Year by unanimous decision against a field of exceptional competitors.”

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Pretty much every car enthusiast on the planet has been looking at the Model S with interest since it started rolling off the production line, and pretty much everybody who has driven one has had a transformative experience. As Bradley Berman at the New York Times put it, “Put simply, the automobile has not undergone a fundamental change in design or use since Henry Ford rolled out the Model T more than a century ago. At least that’s what I thought until I spent a week with the Tesla Model S.”

Meanwhile, Toyota (NYSE:TM) announced a voluntary safety recall of approximately 670,000 U.S. Prius vehicles from the year 2004 to 2009. The recall was issued because of concerns over the steering extension shaft and an electrically driven water pump in some vehicles that could fail because of improper installation.

The U.S. recall is part of a broader 2.7 million vehicle worldwide recall that suggests lingering quality control problems for the world’s largest automaker. Just last month, the company issued a massive 7.4 million vehicle recall because of an improperly installed window switch that could cause fires. The Toyota management promised to crack down on quality issues as a result of that incident, but the company to be having a difficulty regaining its previously stellar quality reputation.

General Motors (NYSE:GM) issued a much smaller recall on Wednesday, pulling about 15,500 vehicles back to the shop. GM will be fixing a potential issue in the 2012 model year Buick Verano where the driver-side air bags might not deploy during a crash. The company will also be fixing problems with the rear-seat head restraints in 2013 model year Cadillac XTS sedans.

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