Electric-car maker Tesla Motors (Nasdaq: TSLA) has no shortage of critics. Launched in 2003 and led by CEO Elon Musk, the company set out to create not only the best all-electric car ever built, but also the best performance vehicle on the planet. In 2008, the start-up released the Roadster and proved to the world that it could be done, albeit at a hefty price. Looking to the future, the EV company suspended production of the Roadster and recalibrated -- setting its sights on a new challenge: scale up production on increasingly affordable all-electric sedans. Once again, Tesla was met by enormous skepticism.

The short of it
Tesla kicked off 2012 as one of the most-shorted U.S. stocks in the market, with nearly 65% of its shares sold short. While that float has fallen to around 38% today, it's still a high percentage of so-called shorters to have betting against you. For comparison, just look at rival auto manufacturers General Motors (NYSE: GM) and Ford (NYSE: F) -- GM has a short-float of 8%, while Ford's is less than 4%. Data from the Russell 3000 Autos Index is equally dispiriting. The index -- which includes GM, Ford and Tesla -- is up just 1.5% this year, against an 8% gain in the Russell 3000 Index.

While other automakers have vast resources and in some cases, oil-backed subsidies, these are luxuries not afforded to a start-up EV company. When Mr. Musk came to Fool headquarters last year, I was far from sold on the idea of a newbie in the green-tech sector rising up to one day become the greatest automaker of the 21st century. Whether this becomes a reality is now largely determined by the success or failure of its new Tesla Model S sedan.

Underpromise
According to Tesla, the seven-passenger car packs superior performance to the tune of zero to 60 mph in 4.4 seconds. Tack on a top speed of 125 mph and other electric-vehicles feel like golf carts by comparison. For example, the 2012 all-electric Ford Focus tops out at a speed of 84 mph, fits only five passengers including the driver, and has a limited range of roughly 100 miles. Tesla's Model S, on the other hand, has a variety of ranges (depending on the battery package and pricing) and offers a base-range of at least 160 miles.

Further, Tesla's top shelf battery pack achieved 320 miles on a single charge according to the EPA two-cycle economy tests. As range improves so do the critics' attitudes toward EVs. And even as these tests get more difficult (EPA recently added three cycles), Tesla is light-years ahead of its closest competitors in terms of battery performance.  

Overdeliver
This month, Tesla briefly silenced naysayers when it announced plans for an early delivery of its new $49,900 all-electric car. Not long ago, critics questioned whether the company could get all of its powertrain components in a row for the slated July delivery date. We now know that production of its Model S is not only going as planned -- but is also ahead of schedule. Shares climbed 10% on this news, despite quarterly results coming in below the Street's estimates.

This is a huge vote of confidence for Musk's company at a time when it needs it most. True, the basic 40 kwh battery model is still expensive at $49,900 after federal tax credits. However, it's all part of Musk's master plan. In 2006, as the primary financier for Tesla, Musk penned the grand design -- a game plan that still holds true for the company today.  

  1. Build sports car
  2. Use that money to build an affordable car
  3. Use that money to build an even more affordable car (Model X)
  4. While doing above, also provide zero-emission electric generation options

So far, so great
Tesla has more than lived up to its goal of providing a zero-emission powertrain. In fact, ongoing supply deals with mature automakers Daimler and Toyota (NYSE: TM) are helping to bridge the gap to profitability. Toyota purchased battery packs and motors from Tesla for the new electric version of its popular RAV4 compact SUV. According to Bloomberg, Tesla this month announced a new powertrain agreement with Daimler this month for an all-electric Mercedes-Benz in 2014. "This program is expected to exceed in value the sum of all powertrain agreements signed in Tesla history," Musk said. And, I suspect the company will see similar supply deals once its Model S reaches drivers next month.

While the road to mainstream acceptance is paved with many potholes, Tesla continues to overdeliver on its promises, and I don't see why the delivery of Model S will be any different. However, it would be naive to think that the transition to EVs and sustainable energy could happen overnight. But I should point out that across the country, cities and states are promoting energy efficient solutions, bankrolling the deployment of electric cars and putting standards in place through organizations like the Electric Vehicles Standards Panel to help speed adoption.

Major U.S. companies are also showing their commitment to electric vehicles. General Electric (NYSE: GE) is finally making good on its 2010 promise to purchase an army of gas-free cars by 2015. The company is coughing up $1 billion for 25,000 EVs for its own fleet as part of a plan to accelerate the acceptance of electric-powered transportation. With rising oil prices and stricter government standards on fuel efficiency, there's never been a better time to end our addiction to petroleum-fueled transportation.

Why Tesla Motors will win
Tesla isn't trying to pick up where traditional automakers left off. This is a company that's writing the sequel to an internal combustion engine that ignited a multi-trillion-dollar industry. If Tesla is able to deliver on its promise of developing an affordable all-electric car at mass production, consumers and critics alike will come running. The company will deliver its lower-priced Model S beginning June 22 -- a milestone that I think will help critics better grasp Tesla's full potential. Tesla has the power to make a real difference in the world, but it isn't alone. Click here to discover the next big technology up-and-comer in this free video report from The Motley Fool: "The Future Is Made in America."