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No, Tesla wasn’t “cheated” in the Model 3 headlight safety test by the IIHS
With the Insurance Institute for Highway Safety’s release of initial crash test information for the Tesla Model 3 came cries from many in the electric vehicle community that Tesla was “being cheated.” This isn’t entirely true as the new IIHS test removes a lot of cars out of the Top Safety Pick+ rating, the highest accolade the independent safety tester will give a car.
The Insurance Institute for Highway Safety (IIHS) is an independent testing organization funded by insurance companies and some of the banks who back them. The IIHS purchases every car it tests–usually several of each–and tests these vehicles in their highest-available safety configuration. These crash tests usually destroy the vehicles in question, of course, but give an independent, third-party result not otherwise available.
When the IIHS’ initial safety results for the Tesla Model 3 were released, they included ratings for only two of the seven total ratings given to a vehicle. Those ratings, posted to the IIHS.org website, created a lot of response from the community regarding the failure of the Model 3’s headlamps to pass muster.
The tests so far include only the non-invasive, non-destructive tests normally conducted by the IIHS. Namely to crash mitigation systems and headlamps. It’s likely that the next test to see release on the Model 3 will be for LATCH child safety system use, another non-destructive test. From there, crash testing will begin. For that, IIHS needs to receive more Model 3 vehicles (5 in all), the rest of which are on order and expected later this year. Like any other Model 3 buyer, delays in manufacturing have put the IIHS’ ownership of the cars for evaluation on hold.
How the IIHS Conducts Headlight Tests, and Why
The IIHS conducts headlamps tests because, according to the organization, about half of all fatal crashes in the U.S. occur in the dark and many of those are on unlit roads where headlamps are the only thing illuminating whatever’s in front of the car. Although headlights are mandatory and minimum illumination requirements are required by law for all street-legal vehicles, there is a wide variance in how much (and how useful) that illumination can be. Especially with the advent of new lighting technologies.
“Headlight technology has been developing rapidly in recent years. LED and high-intensity discharge (HID) lamps have begun to replace the traditional halogen ones,” IIHS explains on its website. “Many automakers offer curve-adaptive headlights, which respond to steering and swivel according to the direction of travel. Many also offer high-beam assist, a feature that can increase the use of high beams..” These and other variables mean that headlights of the same type on one vehicle can be much worse than they can on another. Even little things like how the lights are focused, what type of light they emit, etc. can change effectiveness.
[Credit: Parker Smith via YouTube]
For those reasons, the IIHS instituted a headlight testing methodology in 2016. Starting this year (2018), these test results directly affect a vehicle’s eligibility for Top Safety Pick+ status. So far in 2018, only a handful of models have received TSP+ ratings. Somewhat surprising for luxury and high-end car buyers is the fact that almost all of those TSP+ vehicles are lower-end vehicles from makes like Hyundai and Subaru.
Testing for headlamps is conducted using a multi-part evaluation using a hypothetical, clear, two-lane road. The tests include measurements in a straightaway, measuring both the length and amount of illumination as well as the amount of glare the lights create for oncoming drivers. Then a gradual left- and right-hand turn and a steeper left- and right-hand curve are measured for a total of five directions in all.
Results are taken from varied distances at 10 inches high and 3-feet, 7-inches high (from the ground) to mimic where the driver is looking (out and down) and where oncoming vehicle drivers are seeing from (higher up). Ratings are then assigned according to how these measurements line up with a hypothetical ideal headlight system. Both low and high beams are tested the same way with the low beams being weighted for scoring as they are used most often in the real world. Vehicles with automatic high beam systems are given more points as the high beams will be used more often.
The Controversy Surrounding the IIHS Headlight Test
The inherent weakness in this IIHS test is similar to that of most of its advanced testing: it’s only tested on the ideal vehicle trim level and options. In other words, the testing is most likely happening on the most expensive model being sold, not necessarily on the most mainstream version of the vehicle. This becomes obvious when the bulk of the Top Safety Pick+ list is comprised of vehicles like the 2018 Subaru WRX.
The WRX is a great car, sure; a personal favorite in fact. But its winning of a TSP+ badge is a little misleading. The volume-selling model WRX is the mid-tier Premium trim, which doesn’t include the LED headlights or the automatic high beam control tested by the IIHS. To get those, one has to go up to the more expensive Limited trim point and add the EyeSight system. That latter point can only come if the buyer of this driver’s car is willing to drop their manual transmission for a CVT. That’s another sticking point as the WRX has a large percentage of buyers who want to shift the gears themselves.
What all of this means is that the 2018 WRX is a great car, but it’s not likely to be purchased in the configuration which the IIHS used to test its headlamps with. Other cars on the TSP+ list are much the same.
The interesting note here is that unlike actual crash tests, the slightly more subjective headlamp tests of the IIHS fall into the non-destructive tests for other safety equipment that, while respected, are also flawed for the same reason: only top-end models tend to have all of that equipment on them. Unlike those other safety items, however, the headlamp tests can hurt higher-end models while lower-end options would ace them. Why? Because LED headlamps, which consistently appear to fail most of the glare testing that the IIHS does, are generally only found on top-end models or luxury vehicles. There could be a lot of reasons for that, but my personal theory is that it has to do with automakers having to find a median between maximum safe illumination and glare due to how reflective LED lamps are designed.
The current IIHS Top Safety Pick+ list includes no midsize luxury cars (which the Model 3 is considered), though the overall midsize car category has five entries. All of them with caveats as to what must be included (usually top trim point items or options). Last year, under the old rules, most midsize and midsize luxury cars made the TSP+ list and Tesla’s Model S failed to make the list in part, again, for headlights.
It’s difficult to say what will happen with the Insurance Institute’s testing going forward. Likely manufacturers will come up with solutions to receive better scores on the headlamps test, perhaps by changing LED lighting designs or gaming the IIHS tests (as they have in the past with the small front overlap).
Tesla has some smart engineers and could probably figure out a way to remedy the lighting problem that’s kept their vehicles from rating high on IIHS tests in recent years. With a mainstream attempt like the Model 3, that could become a very important goal as buyers in the midsize sedan category tend to be safety conscious consumers.
Tesla (NASDAQ: TSLA) reports its earnings for Q3 today. Here’s what to expect, as the company will reveal its balance sheet after the market closes on Wednesday.
Tesla already reported deliveries just after Q3 ended, and it demolished Wall Street consensus estimates of roughly 462,000 vehicles. Tesla delivered 486,532 cars in the third quarter, which was a big beat, but was down 2.1 percent from the same quarter last year. Energy storage deployments were 13.7 GWh, up year-over-year.
Tesla showrooms picked clean ahead of Q3 end as demand looks strong
For the quarter, analysts have already compiled their predictions for what Tesla will report this afternoon:
- Total Revenues: $28.34B
- Non-GAAP EPS: $0.43
- Operating Margin: 2.5%
- Operating Income: $721M
- Free Cash Flow: ~-$4.51B
Here are a few things we are looking forward to hearing about on the call:
Automotive Gross Margin and Overall Profitability
This was 16.3 percent in Q2, down from 19.2 percent in Q1, and was impacted by warranty charges and some fading regulatory credits. Consensus implies overall gross margin near 18 percent, but a miss here would potentially reinforce concerns about pricing pressure on its vehicles.
Pay attention to energy storage margins as well, especially since Tesla missed GWh expectations, although it was still a strong quarter.
Robotaxi/Cybercab, Unsupervised FSD, and Optimus Progress
The Say questions from retail investors usually focus on these types of projects, and this quarter is no different. Scaling the Cybercab fleet beyond Austin amid the open NHTSA safety review, timeline for Unsupervised FSD in customer cars, Robotaxi unit economics, and Optimus cost per unit plus when it could start generating revenue, are all things to be looking for.
Any concrete timelines or regulatory path details will likely move the stock more than the near-term numbers. SpaceX merger speculation, which was detailed during SpaceX’s earnings call last night, may also surface, although the key details were shared last night.
Elon Musk just confirmed the Tesla and SpaceX merger step everyone was waiting for
Say Investor Questions
- How does the Cybercab fleet scale past Austin, and what’s the regulatory path outside Texas given NHTSA’s open safety review?
- When can we anticipate FSD unsupervised in customer cars?
- When will the CyberCab be available for customer purchase/ownership?
- What’s the unit economics per paid robotaxi mile, and how does it compare to the thirty-cent target?
- Tesla has acknowledged that HW3 vehicles cannot support unsupervised FSD. When will owners know whether they can upgrade their hardware for free, and when will Tesla provide a clear plan?
The full Earnings Call will be streamed this evening after market close around 5 p.m. this evening.
SpaceX confirmed the date of Starship’s 15th launch window with some massive ambitions for the mission, as it will attempt to catch Ship for the first time.
CEO Elon Musk confirmed during SpaceX’s Earnings Call last night on October 20 that it would launch Starship for its 15th test flight in November, and there are some incredible things the company wants to try, making it perhaps the most groundbreaking launch in the program’s history.
SpaceX delivers blockbuster Q3 results as Super Intelligence segment booms
The most major development of the call was SpaceX’s intention to catch Ship alongside catching the Super Heavy Booster, something that has happened in the past. SpaceX showed an animation of the Ship catch, which will be done on the launch tower’s chopsticks:
SpaceX has released a new Starship tower catch animation for the upcoming Flight 15! https://t.co/kStn01Da8u
— Truthful🛰️ (@Truthful_ast) October 20, 2026
This monumental goal is to catch both the Ship and Booster in a dual-catch scenario, an incredible feat since SpaceX has never been able to reuse a Ship after launch. Musk said it would be “the first time that an orbital launch vehicle has been fully recovered,” and said it would be a “profound technology milestone.”
Musk said the odds of success on this first Ship catch attempt are “more likely than not,” but SpaceX is ultimately prepared for more tries moving forward. The SpaceX frontman said that, starting next year, Starship would have a “steady stream” of flights through the end of the year.
The cadence will accelerate in 2027, with Musk stating the company plans to target weekly flights in the first half of 2027 and twice-weekly by year-end.
The Flight 15 attempt follows that of Flight 14, which took off in late September and was Starship’s first orbital mission. It deployed 26 Starlink V3 satellites, accomplished a controlled ocean splashdown of both stages, and shed more light on potential challenges for the program moving forward.
As of now, the Starship program is firing on all cylinders.
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Wall Street analysts rapidly raised price targets on SpaceX (NASDAQ: SPCX) after the company reported a bullish third quarter for 2026 following the market close on October 20. Shares were sent sharply higher in after-hours and premarket trading.
SpaceX posted revenue of $14.6 billion, a 161 percent year-over-year increase that comfortably topped consensus estimates, which fell near $12.7 billion. The company also posted a net profit of $4.4 billion from a prior-year loss, with adjusted EBITDA reaching $8.8 billion.
More price target movement:
🚀 Cantor Fitzgerald lifted its target to $345 from $246 (Overweight).
🚀 Barclays raised its target to $300 from $254 (Overweight).
🚀 Citi increased its target to $240 from $200 (Buy),
🚀 UBS moved to $230 from $210 (Buy)
🚀TD Cowen raised its target to $224 from $200 (Buy).
🚀Morgan Stanley held an Overweight rating with a $300 target.
🚀Other firms also adjusted higher, including Wells Fargo (to $274 from $214) and Clear Street (to $248 from $217). Analysts broadly cited the strong quarterly print, accelerating AI compute expansion, Starlink progress, and Starship milestones as drivers of higher long-term growth and earnings power.— TESLARATI (@Teslarati) October 21, 2026
Its Super Intelligence (AI) division generated roughly $7.6 billion and became the largest revenue contributor, growing nearly 830 percent year-over-year, while the Connectivity segment delivered $5.2 billion on strong subscriber additions that lifted the consumer base to 13.6 million for Starlink.
The Earnings Call proved especially catalytic, as CEO Elon Musk and CFO Bret Johnsen outlined Q1 2027 revenue guidance of $33 billion to $37 billion, which was far above the roughly $22 billion analysts had modeled, alongside fourth-quarter capital-expenditure plans of $35 billion to $40 billion focused on AI compute infrastructure at sites including Memphis and Southaven.
SpaceX delivers blockbuster Q3 results as Super Intelligence segment booms
Management targets 2.5 to 3 gigawatts of nameplate compute capacity by year-end and discussed pathways to 13 gigawatts or more by the end of 2027. Musk described relentless demand from hyperscalers and other customers, with compute pricing supporting payback periods of less than a year and potentially as short as six months.
Additional highlights included Starship’s recent orbital success and V3 satellite deployment, Starlink pricing and enterprise momentum, rapid Grok Bot adoption, spectrum expansion plans, and the formation of special committees to explore a possible combination with Tesla.
These elements prompted a wave of price-target increases:
- JPMorgan more than doubled its target to $500 from $240 while maintaining an Overweight rating.
- Cantor Fitzgerald lifted its target to $345 from $246 (Overweight).
- Barclays raised its target to $300 from $254 (Overweight).
- Citi increased its target to $240 from $200 (Buy),
- UBS moved to $230 from $210 (Buy), and
- TD Cowen raised its target to $224 from $200 (Buy).
- Morgan Stanley held an Overweight rating with a $300 target.
- Other firms also adjusted higher, including Wells Fargo (to $274 from $214) and Clear Street (to $248 from $217). Analysts broadly cited the strong quarterly print, accelerating AI compute expansion, Starlink progress, and Starship milestones as drivers of higher long-term growth and earnings power.
Shares, which closed at $147.79 on October 20, jumped roughly 8 percent in early premarket trading on October 21 as investors digested the results and the newly elevated Street targets.
The average analyst price target has moved higher, which reflects greater conviction in SpaceX’s trajectory across launch, connectivity, and the Super Intelligence business, even as elevated spending remains a point of focus.
Tesla reports Q3 Earnings today: here’s what to expect
SpaceX confirms Starship 15 launch window with massive ambitions
