Tesla Motors Inc (NASDAQ:TSLA) continues to receive praise for its Model S sedan. Even the company’s competitors seem to like it. Morgan Stanley analysts Adam Jonas, Ravi Shanker, Paresh Jain and Yejay Ying issued a report to investors explaining what options competitors might have if they want to damage Tesla’s chances at success. However, the analysts said their options are slim to none.

Tesla motors

Tesla’s Model S receives praise

They note that the world’s biggest car companies “must be annoyed at reading all the media headlines about the Model S as a car, Tesla as a company and Elon Musk as a visionary.” Many owners of the Model S sedan say it’s the best car they have ever owned.

The Morgan Stanley analysts said “most serious auto companies” have actually purchased at least one of Tesla Motors Inc (NASDAQ:TSLA)’s Model S sedans “to throw around the track and tear down with a blowtorch.” They note that although no official praise has made, their discussions with management of competing automakers indicates that they are taking Tesla very seriously. In fact, they said many of Tesla’s competitors have expressed their admiration of the Model S.

Just this month, engineers at Volkswagen AG (ETR:VOW) expressed their admiration of the Model S, specifically its axle positioning and battery management.

Is Tesla a real threat?

So should competitors really pay all that much attention to Tesla Motors Inc (NASDAQ:TSLA)? The analysts said that the company is indeed a force to be reckoned with because it has gained 23 basis points of U.S. share with a single product. They note that if the automaker can have a 25 percent gross margin in the fourth quarter of the year with only 21,000 vehicles products, then this could raise questions “and pulse-rates” throughout the auto industry.

They said that in January they were asked whether the automaker would make it through the year, but currently people are asking them if the world’s supply of Lithium batteries will run out because of the Model S sedan’s projected sales volume.

What might competitors do to battle Tesla?

So what could competitors do if they are really worried about Tesla Motors Inc (NASDAQ:TSLA)? They said they could stop buying zero-emission vehicle credits from the automaker to cut off funding for its research and development and capital expenditures. Or they could stop buying battery and power train units from Tesla.

The analysts said apart from making a product that is simply better than what Tesla offers, there isn’t much competing automakers can or should do other than make room for the company. They also said that at this point, Tesla Motors Inc (NASDAQ:TSLA)’s success rides completely on its ability to keep “designing, developing and selling attractive vehicles and making money while doing it.” They said the bar has been set high with the Model S, but they believe the Model X crossover vehicle, Tesla’s next offering, might be even better than the Model S.