For investors following Tesla (NASDAQ:TSLA), it's very clear what the most important thing is for the company right now: execution. Fortunately, Tesla's international expansion appears to be on target. As promised, the company has entered the last right-hand drive market it had planned to deliver the Model S to by the end of the summer: Japan.

Tesla's rapid international expansion
"Our addressable market will increase with the launch of the right hand drive Model S in the United Kingdom next month, and in Japan and Hong Kong later this summer," Tesla said in its first-quarter letter to shareholders.

Until now, Japan was the missing link in the markets promised by "later this summer." Tesla has already begun deliveries to right-hand drive markets United Kingdom and Hong Kong. With deliveries now arriving in Japan, Tesla's execution on international expansion seems to be going as planned.

The list of markets to which Tesla is delivering its Model S is becoming fairly long:

  • U.S.
  • Canada
  • Belgium
  • Denmark
  • Germany
  • France
  • U.K.
  • Italy
  • Netherlands
  • Norway
  • Austria
  • Switzerland
  • Sweden
  • China
  • Hong Kong
  • Japan

Deliveries to right-hand drive market Australia are likely to begin sometime within the next few months.

Why Japan is key
Tesla's performance in Japan will be closely watched. The company's government and top auto manufacturers are making big bets on fuel-cell -- the technology that is often considered the best alternative to battery electric vehicles.

Toyota (NYSE:TM) announced a hydrogen fuel-cell vehicle for the Japan market earlier this year. The vehicle has a starting price of about $70,000, in line with the pricing for Tesla's Model S. Backed by the Japanese government's commitments to invest in hydrogen filling stations and to provide subsides for the purchases of fuel-cell vehicles, Toyota isn't taking the initiative lightly.

But Toyota doesn't appear to be 100% confident that fuel-cell vehicles are going to be mutually exclusive of electric vehicles in the future. The company appears to still be carefully hedging its bets, according to a comment from Tesla CEO Elon Musk in Tokyo today (via Bloomberg Businessweek).

"If you look out maybe two or three years from now, I would not be surprised if there was a significant deal with Toyota and Tesla," Musk said. The scope of the deal, Musk told reporters, could be larger than the agreement Tesla has with Toyota for the RAV4 EV.

Tesla is currently providing the powertrains and battery packs for the RAV4 EV, although earlier this year the two companies said they are ending the relationship, for now. Without Tesla's powertrain and battery pack supply, Toyota is winding down the sales of its RAV4 EV. Musk said at Tesla's annual shareholder meeting in June that it makes sense for Tesla to not renew its contract to supply parts to Toyota since Tesla's supply is limited.

Model S outside of Tesla's headquarters in Palo Alto, California. Source: Tesla Motors.

Notably, "two or three years from now" falls right into the timing of when Tesla plans for its Gigafactory to go live. Could Toyota perhaps be making a bigger bet on electric vehicles in the future than it currently appears?

There are no good reasons that electric vehicles and fuel-cell vehicles can't coexist. The most likely scenario is that both technologies will prevail in the future. The question, however, is which technology will see more rapid mass-market adoption? With the Gigafactory in route and Tesla's wild success with the Model S, electric vehicles appear to have a massive head start. The key battles may begin in Japan.

Daniel Sparks owns shares of Tesla Motors. The Motley Fool recommends and owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.