The Model S is selling well. (Tesla)
It has all the earmarks of being a late 1990s bubble stock, but for now Tesla Motors can't seem to do anything wrong. And investors keep rewarding the young electric-vehicle company with more and more capital; so much so that it paid back its $465 million government loan way ahead of schedule.

Tesla shares have shot up more than 100% since January, and with investors seemingly with an endless appetite for shares CEO Elon Musk is going to issue more stock and use the proceeds to pay back tax-payers.

Musk, an entrepreneur who founded PayPal and made his first fortune selling the online commerce site to bay has hinted strongly through his Twitter account that he plans to use the funds from a $1.08 billion stock offering to pay off Department of Energy loans that helped him get the car company off the ground.

It's a positive story for the Obama Administration, which has taken heaps of criticism for similar DOE loans made to now-bankrupt solar-panel manufacturer Solyndra and failed electric carmaker Fisker Automotive, as well as bailing out General Motors.

Tesla has been on a role and posted its first-ever profit in the first quarter. But there is a catch to all the enthusiasm for the company's performance. While it is true that orders for Tesla's Model S electric vehicles are up and exceeding supply, it is also true that Tesla squeaked out an $11.2 million profit only after it had sold $68 million in so-called zero-emission credits to other automakers.

Automakers need to build a certain number of zero-emission (electric) vehicles per year to satisfy regulations in several big states like California. In order to satisfy those regulations, some companies buy the credits from companies like Tesla. Auto industry analyst Adam Jonas of Morgan Stanley estimates Tesla will book $188 million this year just from selling those credits.

Telsa delivered 4,900 cars in the first quarter, and says it has more than 20,000 orders to fill worldwide. That's a very decent book of sales for Tesla, but the level of dependence on selling zero-emission credits should worry some investors as many companies are launching their own EVs and thus won't need Tesla credits much longer. Indeed, Tesla says the value of the credits is going down in the future.

Tesla founder Elon Musk told analysts earlier this month that his profit targets for the company are not dependent on the credits. "We will sell them if we can," Musk said.

Tesla has been trading between $85 to $95 a share in the last week. That is well above its 52-week low of $25.52. It's market cap is above $10 billion at that share price, this it is trading at a multiple of roughly 10,000 time earnings.

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