Tesla is about to confront dueling best- and worst-case scenarios, and anything could happen

Tesla is preparing for its biggest year ever.

In the next six months, it will launch the $35,000 Model 3 mass-market car, and, over the course of 2017, the investment community will find out whether Elon Musk's company can live up to its new business model as a vertically integrated energy firm, after its 2016 acquisition of SolarCity for $2 billion.

The stakes are high for the company and its $40 billion market cap. On Wall Street, the bear case for Tesla indicated that its stock could plummet to $50 from the current level of about $250. The bull case suggests that $500 per share could be in the cards.

Such a wide disparity has driven wild volatility in Tesla's share price over the past two years. And to call it disparity really does investors a disservice. It's actually disagreement over whether Tesla can be a successful sustainable-energy conglomerate or settle into a modest role as a provider of luxury electrified transportation.

This year will be critical to Tesla matching bullish expectations, or trimming itself back and witnessing the bear case take hold.

So there are two scenarios that could play out: best and worst.