Tesla Model S wins Motor Trend's Car of the Year. Are electric cars here to stay?

Tesla Motors made history Tuesday when the Tesla Model S became the first all-electric vehicle to win Motor Trend's Car of the Year award. Will Tesla's honor silence critics of the electric car industry?

Stephen Lam/Reuters/File
A Tesla Model S, the company's first full-size electric sedan, is displayed at the Tesla factory in Fremont, Calif., in this October 2011 file photo. Tesla winning Motor Trend's Car of the Year is good news for an electric car industry that has been labeled a failure by some analysts and politicians.

The Tesla Model S nabbed one of the auto industry's most coveted awards this week when Motor Trend named the electric vehicle as their 2013 Car of the Year.

It is the first time in Motor Trend's 64-year history that the award has gone to a vehicle not powered by an internal combustion engine. 

"It drives like a sports car, eager and agile and instantly responsive," wrote Angus MacKenzie, editor-at-large of Motor Trend Magazine. "But it's also as smoothly effortless as a Rolls-Royce, can carry almost as much stuff as a Chevy Equinox, and is more efficient than a Toyota Prius." 

The announcement is a boost for an EV industry labeled a failure by some analysts and politicians. 

Some expressed concern over Tesla as recently as September, when the company announced plans to sell up to 4.9 million new shares of common stock and seek a waiver from certain conditions on its $465 million in federal loans. Tuesday's announcement may put to rest some doubts about the company's viability.

“Our aspiration with the Model S was to show that an electric car truly can be better than any gasoline car, which is a critical step towards the widespread adoption of sustainable transport,” said Elon Musk, co-founder and CEO of Tesla Motors, in a statement. “Nothing illustrates this more clearly than winning Motor Trend’s Car of the Year by unanimous decision against a field of exceptional competitors.”

The Model S beat out 11 finalists for the prize, including the Porsche Boxster, BMW 3-series, Lexus GS, and Subaru BRZ. 

Motor Trend made waves last year when it awarded the 2011 prize to the Chevy Volt – a plug-in electric vehicle with an on-board gasoline generator. The gas-electric hybrid Toyota Prius won the award in 2004.

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Tuesday's announcement also bodes well for an American car industry pockmarked in recent years by bailouts and bankruptcies. Just last week, Suzuki Motor Corp.'s American unit filed for bankruptcy and announced it would stop selling cars in the United States. The Brea, Calif.-based company is the sole distributor of Japanese-owned Suzuki Motor Co. vehicles in the continental US.

"The mere fact the Tesla Model S exists at all is a testament to innovation and entrepreneurship, the very qualities that once made the American automobile industry the largest, richest, and most powerful in the world," MacKenzie wrote. "America can still make things. Great things."

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