Bet against Elon Musk at your own peril. Just ask The New York Times—or the short-sellers who had been counting on Musk's Tesla Motors to be the next electric carmaker to short-circuit.
Quite the opposite has happened, the California EV manufacturer reported Wednesday its first-ever profit of $11.2 million as sales of its Model S sedan outpaced even its own, optimistic expectations. And Tesla is promising even better numbers for the rest of the coming year as it ramps up production at its assembly plant near San Francisco and opens up new markets in Europe and Asia.
(Read More: Tesla Earnings Blow Past Expectations; Shares Surge)
That's sent Wall Street into a frenzy, Tesla shares surged 24 percent in the hours after the maker's first-quarter earnings announcement—and doubled since hitting a low point late last winter. That's bad news for the short-sellers who hold more than 40 percent of the battery-carmaker's shares, and who had been anticipating more bad news after Tesla's unexpectedly steep loss during the fourth quarter of 2012.
Skeptics certainly have had reason to predict the worst, at least if they were watching the rest of the nascent electric vehicle market where, with rare exception, things have been coming unplugged.
The much-ballyhooed Fisker Automotive recently laid off three quarters of its workforce and, during a hearing on Capitol Hill last month, company officials signaled bankruptcy may be in the offing. Little battery-carmaker Coda recently filed for Chapter 11. Even the much ballyhooed Chevrolet Volt has been losing momentum. And battery-car suppliers may be in even worse shape, battery maker A123 being purchased by a Chinese maker—and renamed B456—after its own financial collapse.
(Read More: Fisker Fires Most of Its Rank-and-File Employees)
There are a few modest bits of good news, such as the recent upturn in demand for the Nissan Leaf after the Japanese makers cut the price of the battery-electric vehicle and began production at a new plant in Tennessee. But for the moment, at least, Tesla seems to be the battery-car market's only real success story.
The Silicon Valley firm managed to claw its way into the black after a decade of losses—and despite having to cough up $13 million toward the $465 million federal loan it had received as part of a controversial Department of Energy program meant to fund clean, alternative propulsion technology.
Things hadn't looked nearly so good going into the New Year. The launch of the Model S went far more slowly than expected at the old Toyota plant near San Francisco that Tesla had purchased. But suggesting "our manufacturing processes stabilized," Musk told shareholders that production is now running faster than expected, even as the number of manhours per vehicle has dropped by 40 percent. The maker sold about 10 percent more of the battery sedans than it expected during the first quarter, and at a price well above its initial projections. In fact, Tesla has now dropped the base version of the Model S, focusing on longer-range—and significantly higher-priced—versions.
For the full year, Tesla now expects to produce about 21,000 of the sedans. Compared to most manufacturers, that number would barely show up on the sales charts, but it's significant for the electric vehicle industry. And it could create even more woes for short-sellers and skeptics.
(Read More: Behind the Wheel, Putting the Tesla to the Test)
For all his bravado, Musk recognizes it won't be easy to keep the moment going. As the front man for Tesla, he has taken a number of steps meant to "address some of the issues people have about electric cars" in recent weeks, including a new no-fault battery warranty that will cover just about any failure short of an owner intentionally destroying the lithium-ion pack. And a new finance program allows buyers to trade the vehicle back in for a guaranteed price after three years. They can alternately trade up for a more expensive version of the sedan.
"I want to give people peace of mind," explained Musk, who made his fortune with the Internet PayPal service and now also runs the SpaceX commercial space delivery program.
But perhaps the biggest endorsement has come from the widely respected and closely followed Consumer Reports magazine, which has given the Model S a score of 99 on a 100-point scale, something no other vehicle has achieved in six years.
"The Tesla Model S is packed with technological innovation," wrote Jake Fisher, director of Automotive Testing for the magazine. "It accelerates, handles and brakes like a sports car, it has the ride and quietness of a luxury car and is far more energy efficient than the best hybrid cars."
That's a big turnaround from the harsh review the Model S got from The New York Times earlier this year, a write-up that triggered an angry war of words that the newspaper ultimately conceded, acknowledging its reporter did not use "good judgment."
Considering all the problems facing the battery-car market, the short-sellers likely aren't about to give Tesla an easy pass. The maker is going to have to continue delivering in the quarters ahead. But if it does, that could be good news for its competitors, as well, a signal that there really is a place for the battery car in the U.S. market.
_By Paul A. Eisenstein, NBC News contributor