Tesla S 2012 Getty Images
The Model S. Getty Images

Tesla Motors Inc. (NASDAQ:TSLA) did pretty well out of the gate in Norway, one of the world’s most electric-vehicle-friendly nations.

September was the first real selling month there for the company’s acclaimed Model S luxury electric car, and, as preliminary mid-month figures suggested, consumers have embraced Norway’s enticing EV incentives to become Tesla’s strongest European market so far.

Tesla’s sales performance as it expands globally is being closely watched because, aside from all the attention that has sent the company’s stock price into the realm of irrational exuberance, Tesla’s future success will ride on two simple facts: how many cars the company can sell and how much money it can make selling them.

According to Norway’s auto association, the OFV, Tesla delivered 616 units last month, representing just over 5 percent of all car and light truck sales in the affluent country of 5 million people. Tesla ranked seventh place by brand sales volume – behind perennial favorites Volkswagen, Toyota, Volvo, Ford, BMW and Skoda. The Model S outsold the previous top model, the Volkswagen Golf, by 55 units.

The fact that Tesla, the Palo-Alto, Calif.-based 10-year-old EV startup, is even being mentioned on a list of big global players is a real feat, but what’s more striking about September’s figures is that the Model S was the top-selling vehicle by model, leading green-car boosters to swoon.

“Well, here's a first: The best-selling car in Norway is the Tesla Model S. Not the best-selling electric car. Not the best-selling car with a plug. For the month of September, the Tesla Model S was the best-selling car, period,” writes John Voelcker of Green Car Reports.

“They've again underpromised and overdelivered,” writes Mario Kadastick on the Tesla Motors Club's website. “At this rate Tesla is going to make quite an impression on the world if they can pull of a serious market penetration in Norway due to the massive incentives.”

“Massive incentives” have certainly played a role in Norway’s embracing of clean machines. Norway offers great lures for buyers of electric vehicles, which also has helped sales of the Nissan Leaf. Nissan sold 349 of its EV compact in September and 3,039 of them in the first nine months of 2013, 3 percent more than in the same period last year.

While Nissan’s sales are well-established in Norway, Tesla is a new player. Like retail operations, cars get a novelty-factor bump in sales as curious buyers initially flock to a new store or product. But more important, Tesla is starting to fulfill back orders for its Model S, so not all of these deliveries are sales that took place in September.

Nevertheless, these figures provide some further indication that the company will more than meet its sales targets for 2013. And it can thank Norway’s generous incentives and wealth for part of that. Tesla will announce its third-quarter earnings early next month. Investors will look first to sales volume and second to margin improvement.

Meanwhile, it looks like Tesla's stock might be correcting. On Wednesday Baird downgraded TSLA from "outperform" to "neutral," in one of the few bearish notes that have come out in weeks. The news knocked nearly 2 percent off the price, but it's still 328 percent higher than it was six months ago.